<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 12, 1996.
REGISTRATION NO. 333-5413
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
WILLBROS GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------
REPUBLIC OF PANAMA 1623 98-0160660
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)
EDIFICIO TORRE BANCO GERMANICO
CALLE 50 Y 55 ESTE, APARTADO 850048
PANAMA 5, REPUBLIC OF PANAMA
(50-7) 263-9282
(ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
LARRY J. BUMP
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
WILLBROS GROUP, INC.
EDIFICIO TORRE BANCO GERMANICO
CALLE 50 Y 55 ESTE, APARTADO 850048
PANAMA 5, REPUBLIC OF PANAMA
(50-7) 263-9282
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
ROBERT A. CURRY, ESQ. JONATHAN I. MARK, ESQ.
CONNER & WINTERS CAHILL GORDON & REINDEL
2400 FIRST PLACE TOWER 80 PINE STREET
15 EAST 5TH STREET NEW YORK, NEW YORK 10005-1702
TULSA, OKLAHOMA 74103-4391 (212) 701-3000
(918) 586-5711
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practical after this Registration Statement becomes effective.
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 check the following box. [_]
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. [_]
---------------
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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- -------------------------------------------------------------------------------
<PAGE>
CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K
<TABLE>
<CAPTION>
FORM S-1 ITEM NUMBER AND HEADING CAPTION OR LOCATION IN PROSPECTUS
-------------------------------- ---------------------------------
<C> <S> <C>
1. Forepart of the Registration
Statement and Outside Front
Cover Page of Prospectus.... Outside Front Cover Page.
2. Inside Front and Outside Back
Cover Pages of Prospectus... Inside Front and Outside Back Cover Pages.
3. Summary Information, Risk
Factors and Ratio of
Earnings to Fixed Charges... Prospectus Summary; Risk Factors; Selected
Consolidated Financial and Other Data;
Consolidated Financial Statements.
4. Use of Proceeds.............. Prospectus Summary; Use of Proceeds.
5. Determination of Offering
Price....................... Outside Front Cover Page; Risk Factors;
Underwriting.
6. Dilution..................... Dilution.
7. Selling Security Holders..... Principal and Selling Stockholders.
8. Plan of Distribution......... Outside Front Cover Page; Underwriting.
9. Description of Securities to
be Registered............... Dividend Policy; Description of Capital
Stock.
10. Interests of Named Experts
and Counsel................. Not Applicable.
11. Information With Respect to
the Registrant.............. Outside Front Cover Page; Prospectus
Summary; Risk Factors; Dividend Policy;
Selected Consolidated Financial and Other
Data; Management's Discussion and Analysis
of Financial Condition and Results of
Operations; Business; Management; Certain
Transactions; Principal and Selling
Stockholders; Description of Capital
Stock; Shares Eligible for Future Sale;
Consolidated Financial Statements.
12. Disclosure of Commission
Position on Indemnification
for Securities Act
Liabilities................. Not Applicable.
</TABLE>
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+THE 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 JULY 12, 1996
6,000,000 SHARES
[LOGO APPEARS HERE]
WILLBROS GROUP, INC.
COMMON STOCK
THE SHARES OF COMMON STOCK, PAR VALUE $.05 PER SHARE (THE "COMMON STOCK"), OF
WILLBROS GROUP, INC. (THE "COMPANY") OFFERED HEREBY (THE "OFFERING") ARE BEING
SOLD BY CERTAIN STOCKHOLDERS (THE "SELLING STOCKHOLDERS"). SEE "PRINCIPAL AND
SELLING STOCKHOLDERS." THE COMPANY WILL NOT RECEIVE ANY OF THE PROCEEDS FROM
THE SALE OF SHARES BY THE SELLING STOCKHOLDERS.
PRIOR TO THE OFFERING, THERE HAS BEEN NO PUBLIC MARKET FOR THE COMMON STOCK.
IT IS CURRENTLY ESTIMATED THAT THE INITIAL PUBLIC OFFERING PRICE WILL BE
BETWEEN $11.00 AND $13.00 PER SHARE. SEE "UNDERWRITING" FOR THE FACTORS
CONSIDERED IN DETERMINING THE INITIAL PUBLIC OFFERING PRICE. THE COMMON STOCK
HAS BEEN APPROVED FOR LISTING ON THE NEW YORK STOCK EXCHANGE UNDER THE SYMBOL
"WG."
FOR A DISCUSSION OF CERTAIN RISKS OF AN INVESTMENT IN THE SHARES OF COMMON
STOCK OFFERED HEREBY, SEE "RISK FACTORS" ON PAGES 8-13.
-----------
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.
-----------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE DISCOUNTS PROCEEDS TO
TO AND SELLING
PUBLIC COMMISSIONS* STOCKHOLDERS+
<S> <C> <C> <C>
PER SHARE..................................... $ $ $
TOTAL++....................................... $ $ $
</TABLE>
- -----
* THE COMPANY AND THE SELLING STOCKHOLDERS HAVE AGREED TO INDEMNIFY THE
UNDERWRITERS AGAINST CERTAIN LIABILITIES, INCLUDING LIABILITIES UNDER THE
SECURITIES ACT OF 1933. SEE "UNDERWRITING."
+ NO EXPENSES ARE PAYABLE BY THE SELLING STOCKHOLDERS. EXPENSES PAYABLE BY THE
COMPANY ARE ESTIMATED TO BE $ .
++THE COMPANY HAS GRANTED THE UNDERWRITERS A 30-DAY OPTION TO PURCHASE UP TO
900,000 ADDITIONAL SHARES OF COMMON STOCK ON THE SAME TERMS PER SHARE SOLELY
TO COVER OVER-ALLOTMENTS, IF ANY. IF SUCH OPTION IS EXERCISED IN FULL, THE
TOTAL PRICE TO PUBLIC WILL BE $ , THE TOTAL UNDERWRITING DISCOUNTS AND
COMMISSIONS WILL BE $ AND THERE WILL BE PROCEEDS TO THE COMPANY OF $ .
SEE "UNDERWRITING."
-----------
THE COMMON STOCK IS BEING OFFERED BY THE UNDERWRITERS AS SET FORTH UNDER
"UNDERWRITING" HEREIN. IT IS EXPECTED THAT DELIVERY OF CERTIFICATES THEREFOR
WILL BE MADE AT THE OFFICES OF DILLON, READ & CO. INC., NEW YORK, NEW YORK, ON
OR ABOUT , 1996, AGAINST PAYMENT THEREFOR. THE UNDERWRITERS INCLUDE:
DILLON, READ & CO. INC. MERRILL LYNCH & CO.
THE DATE OF THIS PROSPECTUS IS , 1996
<PAGE>
Construction
Willbros specializes in logistically
complex and technically difficult
construction projects in remote Engineering
areas with difficult terrain and
harsh climatic conditions.
Engineering services include
feasibility studies, conceptual and
detailed design, field services,
material procurement and overall
project management.
[Picture of excavation site]
PIPELINE RECONSTRUCTION FOLLOWING A
MAJOR EARTHQUAKE - ECUADOR
[Picture of engineer working at
computer design terminal]
STATE OF THE ART CADD SYSTEM - USA
[LOGO]
Specialty Services
Specialty services include pipe coating,
removal and installation of flow lines,
maintenance and repair of pipelines,
concrete pile fabrication, dredging and
transportation.
[Picture of pipe maintenance crew]
[Picture of flow lines]
FLOW LINES - KUWAIT
MAINTENANCE - OMAN
[Picture of dredging]
GATE--[World map showing Willbros
presence]
DREDGING - NIGERIA
IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and Consolidated Financial Statements and notes thereto appearing
elsewhere in this Prospectus. Unless otherwise indicated, (a) all references in
this Prospectus to the "Company" refer to Willbros Group, Inc. ("WGI") and its
consolidated subsidiaries, (b) all references to the "Predecessor Company"
refer to the consolidated subsidiaries of WGI prior to their acquisition by WGI
in 1992 and predecessors in interest to the business conducted by such
entities, and (c) all references to "Willbros" refer to the Company and the
Predecessor Company collectively or in a historical sense. See "Business--
Willbros Background." All information in this Prospectus relating to the shares
of Common Stock and per share amounts has been restated to reflect a 30-for-1
stock split effected on May 27, 1996. Unless otherwise indicated, all data in
this Prospectus assumes (a) no exercise of the Underwriters' over-allotment
option, and (b) conversion of all outstanding shares of Preferred Stock of the
Company into Common Stock prior to the effectiveness of the Registration
Statement of which this Prospectus is a part.
THE COMPANY
GENERAL
The Company is one of the leading independent contractors serving the oil and
gas industry, providing construction services, engineering services and other
specialty oilfield-related services ("specialty services") to industry and
government entities worldwide. The Company places particular emphasis on
projects in developing countries where the Company believes its experience
gives it a competitive advantage. The Company's construction services include
the building and replacement of major pipelines and gathering systems, flow
stations, pump stations, gas compressor stations, gas processing facilities and
oil and gas production facilities; and the construction of piers, dock
facilities and bridges. The Company's engineering services include feasibility
studies; conceptual and detailed design; field services; material procurement;
and overall project management. The Company's specialty services include
dredging; pipe coating; pipe double jointing; removal and installation of
flowlines; the fabrication and installation of concrete piles and platforms;
maintenance and repair of pipelines, stations and facilities; pipeline
rehabilitation; and transport of oilfield equipment, rigs and vessels.
The Company provides its services through a large fleet of equipment
comprised of, among other things, marine vessels, barges, dredges, pipelaying
equipment, heavy construction equipment, transportation equipment and camp
equipment. The Company's equipment fleet is supported by warehouses of spare
parts and tools which are located to maximize availability and minimize cost.
The Company obtains contracts for its work primarily by competitive bidding
or through negotiations with long-standing clients. In evaluating bid
opportunities, the Company considers such factors as the client, the geographic
location and the difficulty of the work, the Company's current and projected
workload, including the availability of personnel and Company owned equipment,
the likelihood of additional work, the project's cost and profitability
estimates and the Company's competitive advantage relative to other likely
bidders. See "Business--General."
The Company traces its roots to the construction business of Williams
Brothers Company, founded in 1908. Through successors to that business,
Willbros has completed many landmark projects around the world, including the
"Big Inch" and "Little Big Inch" War Emergency Pipelines (1942-44), the Mid-
America Pipeline (1960), the TransNiger Pipeline (1962-64), the Trans-
Ecuadorian Pipeline (1970-72), the northernmost portion of the Trans-Alaskan
Pipeline System (1974-76), the All American Pipeline System (1984-86),
Colombia's Alto Magdalena Pipeline System (1989-90) and a portion of the
Pacific Gas Transmission System expansion (1992-93). Willbros has been involved
in nine of the ten largest gas pipeline projects undertaken in the United
States since 1988. See "Business--Willbros Milestones."
3
<PAGE>
Over the years, Willbros has been employed by more than 400 clients to carry
out work in over 50 countries. Within the past 10 years, Willbros has worked in
Africa, Asia, the Commonwealth of Independent States (the "C.I.S."), the Middle
East, North America and South America. Willbros' relatively steady base of
ongoing construction, engineering and specialty services operations in Nigeria,
Oman, the United States and Venezuela has been enhanced by major construction
and engineering projects in Abu Dhabi, Colombia, Ecuador, Egypt, Gabon, Kuwait,
Morocco, Nigeria, Oman, Pakistan, and the United States. Major clients of the
Company in these countries include operating units of Royal Dutch Shell,
Chevron Corp., Occidental Petroleum, Pacific Gas and Electric and Great Lakes
Gas Transmission Company and governmental entities such as the U.S. Army Corps
of Engineers, Nigerian National Petroleum Corporation, Kuwait Oil Company, Pak-
Arab Refinery, Ltd. and operating units of Petroleos de Venezuela S.A. See
"Business--General."
Between 1979 and 1992, a controlling interest in the Company was held by
Heerema Holding Construction, Inc. ("Heerema"), a leading offshore fabrication
and installation contractor. In 1992, the Company was purchased from Heerema by
a group of investors including management of the Company, certain private
investment partnerships managed by Dillon, Read & Co. Inc. ("Dillon Read") and
persons related to Dillon Read (collectively, the "Yorktown and Concord
Investors"), and Heerema. Subsequent to the Offering, Company management and
employees will own approximately 32.8% of the Company. See "Business--Willbros
Background" and "Principal and Selling Stockholders."
CURRENT MARKET CONDITIONS
Relatively high crude oil and natural gas prices have resulted in
correspondingly strong levels of current and projected capital expenditures by
oil and gas companies to explore for and produce oil and gas reserves.
Accordingly, many significant natural gas, crude oil and petroleum products
pipeline projects and liquified natural gas ("LNG") projects, together with
ancillary construction and other associated projects, are being undertaken,
particularly in developing countries or regions where energy infrastructure
spending has lagged.
The Company believes that certain of these projects will meet its bidding
criteria, and that the Company's worldwide pipeline construction, engineering
and specialty services experience place it in an advantageous position to
compete for such projects. The Company currently has approximately 70 bids
outstanding with respect to potential contract awards in Australia, China,
Egypt, Indonesia, Mexico, Nigeria, Oman, Russia, Saudi Arabia, the United
States and Venezuela. The Company is currently preparing bids with respect to
potential contract awards in Egypt, Indonesia, Nigeria, Oman, Saudi Arabia,
Tanzania and the United States. Finally, the Company expects to prepare and
submit bids with respect to certain other potential construction and
engineering projects in Africa, Asia, the C.I.S., the Middle East, North
America and South America before the end of 1996. See "Business--Current Market
Conditions."
BUSINESS STRATEGY
The Company historically pursued a strategy of maximizing stockholder returns
while maintaining a strong balance sheet. More recently, the Company has
emphasized a growth strategy which encompasses geographic expansion in areas
such as Pakistan and Indonesia, strategic alliances, acquisitions and quality
improvements. In pursuing this strategy, the Company relies on its competitive
advantage in completing logistically complex and technically difficult projects
in remote areas with difficult terrain and harsh climatic conditions. The
Company also relies on its experienced multinational work force of
approximately 3,520 employees, over 80% of whom are citizens of the respective
countries in which they work. See "Business--Business Strategy."
Geographic Expansion. The Company seeks to maintain its presence in regions
where it has previously developed a strong base of operations, such as Africa,
the Middle East, North America and
4
<PAGE>
South America, and to establish a presence in additional strategically
important locations, such as Russia, Pakistan, Indonesia, Egypt and Brazil. In
pursuing this strategy, the Company seeks to identify a limited number of long-
term niche markets in which the Company can outperform the competition and
establish an advantageous position.
Strategic Alliances. The Company seeks to establish strategic alliances with
companies whose resources, skills and strategies are complementary to and are
likely to enhance the Company's business opportunities, including the formation
of joint ventures and consortia to achieve competitive advantage and share
risks. Such alliances have already been established in Australia, Indonesia,
Malaysia, Mexico, Russia, Thailand, the United States and Venezuela. As a
related strategy, the Company may decide to seek an equity stake in a project
in order to enhance its competitive position and/or maximize project returns.
Acquisitions. The Company seeks to identify and acquire companies which
complement its business strategy. For example, in 1994 the Company acquired
(from an affiliate of Heerema) Construcciones Acuaticas Mundiales, S.A.
("CAMSA"), a company operating in the Lake Maracaibo area of Venezuela whose
primary expertise is in marine construction and the fabrication and
installation of concrete piles and platforms for offshore projects. See
"Certain Transactions." The Company will continue to evaluate acquisition
candidates that offer growth opportunities and the ability to complement the
Company's resources and capabilities.
Quality Improvements. The Company's quality improvement program is focused on
obtaining ISO 9000 certification and on continually improving the readiness,
utilization and overall quality of its fleet of equipment. ISO 9000 is an
internationally recognized verification system for quality management overseen
by the International Standards Organization based in Geneva, Switzerland. The
ISO 9000 certification is important to the Company's international operations
in that in recent years such certification has been made a criterion for
prequalification of contractors by certain potential clients and this trend is
expected to continue. The certification process involves a rigorous review and
audit of the Company's management processes and quality control procedures.
During the first half of 1996, five of the Company's subsidiaries achieved ISO
9000 certification. The Company's Nigerian subsidiary is on schedule to achieve
certification by the end of 1996.
Conservative Financial Management. The Company expects to continue to
emphasize the maintenance of a conservative balance sheet in order to finance
the development and growth of its business. The Company also seeks to obtain
contracts that are likely to result in recurring revenues in order to mitigate
the cyclical nature of its construction and engineering businesses. For
example, the Company generally seeks to obtain specialty services contracts of
more than one year in duration. Additionally, the Company acts to minimize its
exposure to currency fluctuations through the use of U.S. dollar-denominated
contracts, by limiting payments in local currency to approximately the amount
of local currency expenses, and otherwise by hedging activities such as
purchasing forward exchange contracts.
WGI is incorporated in the Republic of Panama and maintains its headquarters
at Edificio Torre Banco Germanico, Calle 50 y 55 Este, Panama 5, Republic of
Panama; its telephone number is (50-7) 263-9282. Administrative services for
the Company are provided by Willbros USA, Inc., which is located at 2431 East
61st Street, Suite 700, Tulsa, Oklahoma 74136-1267; its telephone number is
(918) 748-7000.
5
<PAGE>
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by the
Selling Stockholders............. 6,000,000 shares
Common Stock to be outstanding
after the Offering............... 13,860,000 shares (1)
Use of proceeds to the Company.... The Company will not receive any of the
proceeds from the sale of shares by the
Selling Stockholders. If the Underwriters'
over-allotment option granted by the
Company is exercised, there will be
proceeds to the Company which will be used
as working capital, to support expansion of
operations and for possible acquisitions of
assets and businesses. See "Use of
Proceeds."
New York Stock Exchange symbol.... WG
</TABLE>
- --------
(1) Does not include (a) 900,000 shares of Common Stock that may be sold by the
Company upon exercise of the Underwriters' over-allotment option, (b)
1,125,000 shares of Common Stock reserved for issuance under the Company's
1996 Stock Plan, and (c) 125,000 shares of Common Stock reserved for
issuance under the Company's Director Stock Plan.
6
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PREDECESSOR
COMPANY (1) COMPANY
------------ ----------------------------------------------------------
THREE MONTHS
YEAR ENDED YEAR ENDED DECEMBER 31, ENDED MARCH 31,
DECEMBER 31, -------------------------------------- ------------------
1991 1992 1993 1994 1995 1995 1996
------------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME
DATA:
Contract revenues...... $168,875 $180,947 $210,011 $145,716 $220,506 $ 36,001 $ 53,479
Operating expenses:
Contract cost.......... 124,925 127,942 147,991 98,700 161,584 25,594 41,204
Depreciation and
amortization.......... 14,272 15,029 16,672 14,598 15,193 3,634 3,190
General and
administrative........ 19,098 20,200 24,267 24,695 28,184 6,232 6,698
-------- -------- -------- -------- -------- -------- --------
Operating income....... 10,580 17,776 21,081 7,723 15,545 541 2,387
Net interest income
(expense)............. 1,062 (2,133) (785) 835 144 162 (140)
Minority interest...... (1,408) (1,014) (3,615) (1,758) (1,589) (238) (490)
Other income
(expense)............. 3,681 176 5,567 113 (381) 117 570
-------- -------- -------- -------- -------- -------- --------
Income before income
taxes................. 13,915 14,805 22,248 6,913 13,719 582 2,327
Provision for income
taxes................. 4,289 2,764 8,405 (4,146) (75) 465 283
-------- -------- -------- -------- -------- --------
Net income (2)......... 11,636 $ 12,041 $ 13,843 $ 11,059 $ 13,794 $ 117 $ 2,044
======== ======== ======== ======== ======== ========
Net income per share... N/A(1) $ .92 $ 1.00 $ .79 $ .97 $ .01 $ .09(3)
CASH FLOW DATA:
Cash provided by (used
in):
Operating activities... $ 18,502 $ 40,896 $ 66,460 $ (3,771) $ (8,396) $ (7,864) $ 5,969
Investing activities... (20,118) (83,875) (14,621) (13,169) (18,558) (3,960) (1,983)
Financing activities... 7,734 41,758 (8,175) (1,271) (2,321) (515) (1,557)
OTHER DATA:
EBITDA (4)............. $ 30,366 $ 33,257 $ 40,752 $ 22,881 $ 30,631 $ 4,649 $ 5,871
Capital expenditures... $ 20,150 $ 15,047 $ 16,534 $ 7,171 $ 18,946 $ 4,225 $ 2,160
Backlog (5)............ $146,734 $160,565 $ 76,066 $ 97,493 $139,359 $139,407 $104,524
Employees.............. 2,080 3,090 1,870 2,030 3,110 2,630 3,520
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1995 1996 (6)
------------ ---------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents............................... $ 19,859 $ 22,288
Working capital......................................... 38,767 40,977
Total assets............................................ 149,954 143,712
Total debt.............................................. 3,119 2,574
Stockholders' equity.................................... 83,391 84,423
</TABLE>
- --------
(1) Effective for accounting purposes as of January 1, 1992, the Company's then
parent company was sold to a group of investors which included Company
management, the Yorktown and Concord Investors and Heerema. As a result of
the acquisition of the Predecessor Company by the Company, the consolidated
financial statements of the Company reflect the application of purchase
accounting and, accordingly, are presented on a different basis than those
of the Predecessor Company and, therefore, are not comparable. See
"Business--Willbros Background."
(2) Net income in 1991 includes a $1,457 gain on discontinuation of Willbros'
U.S. contract drilling business and a $553 extraordinary item for the tax
benefit of a net operating loss carryforward.
(3) After deducting $724 of dividends on the Company's Preferred Stock.
(4) EBITDA represents earnings before interest expense, income taxes,
depreciation and amortization. EBITDA is not intended to represent cash
flows for the period, nor has it been presented as an alternative to
operating income as an indicator of operating performance. It should not be
considered in isolation or as a substitute for measures of performance
prepared in accordance with generally accepted accounting principles. See
the Company's Consolidated Statements of Cash Flows in the Company's
Consolidated Financial Statements included elsewhere in this Prospectus.
EBITDA is included in this Prospectus because it is a basis upon which the
Company assesses its financial performance.
(5) The Company follows a practice of reflecting anticipated revenues from
uncompleted portions of existing contracts as backlog. Historically, a
substantial amount of the Company's revenues in a given year have not been
reflected in its backlog at the beginning of that year. On average, over
the past four years, actual annual revenues have exceeded 150% of backlog
recorded at the end of each preceding year. No assurance can be given that
future experience will be similar to historical results in this respect.
See "Business--Backlog."
(6) Unless the Underwriters' over-allotment option granted by the Company is
exercised, the Company will not receive any proceeds from the Offering.
Accordingly, no adjustment to the balance sheet to reflect the Offering is
shown. See "Use of Proceeds."
7
<PAGE>
RISK FACTORS
Prospective purchasers of the Common Stock offered hereby should carefully
consider the following factors, as well as the other information contained
elsewhere in this Prospectus.
DEPENDENCE ON OIL AND GAS INDUSTRY
The demand for the Company's services depends largely on the conditions
prevailing in the international oil and gas industry, and specifically the
level of capital expenditures of major oil and gas companies. Numerous factors
influence capital expenditure decisions, including current and projected oil
and gas prices; exploration, extraction, production and transportation costs;
the discovery rate of new oil and gas reserves; the sale and expiration dates
of leases and concessions; local and international political and economic
conditions; technological advances; and the abilities of oil and gas companies
to generate capital. These factors are beyond the control of the Company.
Therefore, no assurance can be given that the Company's business and results
of operations will not be adversely affected because of reduced activity in
the oil and gas industry. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business--General."
FLUCTUATING REVENUES AND CASH FLOW
While the Company relies on its specialty services as a relatively steady
revenue base from year to year, the Company is dependent upon major
construction projects to enhance revenues and cash flow. The availability of
such projects is dependent upon the condition of the oil and gas industry. The
failure to obtain major projects, the delay in awards of major projects, the
cancellation of major projects or delays in completion of contracts could
result in the under-utilization of the Company's resources which would have an
adverse impact on revenues and cash flow. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
While the Company's revenues, operating income and EBITDA for the three
months ended March 31, 1996, are higher than those for the comparable period
in the prior year, no assurance can be given that the Company's revenues,
operating income and EBITDA for the full year 1996 will not be lower than
revenues, operating income and EBITDA for the full year 1995. Backlog as of
March 31, 1996, was $104.5 million, as compared to $139.4 million as of March
31, 1995, a decrease of $34.9 million. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business--
Backlog."
CONCENTRATION OF RISK BY COUNTRY
Due to the limited number of major projects worldwide, the Company may, at
any one time, have a substantial portion of its resources dedicated to one
country. The Company's results of operations are, therefore, susceptible to
adverse events beyond its control which may occur in a particular country in
which the Company's business may be concentrated. For the year ended December
31, 1995, 43% of revenues were generated in Nigeria (47% in 1994 and 41% in
1993); 24% of revenues were generated in the United States (33% in 1994 and
28% in 1993); 13% of revenues were generated in Pakistan (0% in 1994 and
1993); 9% of revenues were generated in Oman (16% in 1994 and 20% in 1993);
and 9% of revenues were generated in Venezuela (3% in 1994 and 0% in 1993).
Operating profit attributable to projects in Africa, substantially all of
which was in Nigeria, accounted for 61%, 107% and 89% of total operating
profit in the years 1993, 1994 and 1995, respectively. At December 31, 1995,
39% of the Company's property, plant and equipment was located in Nigeria, 19%
in Venezuela and 15% in Oman. The Company's operations and assets are subject
to various risks inherent in conducting business in these countries. See "--
Political and Economic Risks," "Business--Geographic Regions" and Note 13 to
the Consolidated Financial Statements included elsewhere in this Prospectus.
DEPENDENCE ON KEY CLIENTS
The Company operates primarily in the oil and gas industry, providing
services to a limited number of clients. Much of the Company's success depends
on developing and maintaining relationships with
8
<PAGE>
certain major clients and obtaining a share of contracts from such clients.
Ten clients were responsible for 78% of the Company's total revenues in 1995
(69% in 1994 and 86% in 1993). Operating units of Royal Dutch Shell accounted
for 32% of the Company's total revenues in 1995 (29% in 1994 and 26% in 1993).
From time to time, international oil companies operating in Nigeria have had
disputes arising from the Nigerian government's tardiness in meeting its
payment obligations. Recently, in connection with one such dispute, Royal
Dutch Shell publicly announced that, if Nigeria did not make the payments
which are presently outstanding, it would reduce its planned investment in
Nigeria by $450 million in the second half of 1996 and cut production by 3.2%
or 30,000 barrels per day. Any such reduction in the level of investment or
production could reduce the amount of contract work awarded in Nigeria which
could materially adversely affect the Company and its results of operations.
The Company cannot predict whether any such actions will be taken and, if
taken, whether they would directly impact current or future prospects of the
Company in Nigeria. See "Business."
BENEFITS OF THE OFFERING TO EXISTING STOCKHOLDERS
The Company's existing stockholders will significantly benefit from the
Offering. Certain of the existing stockholders are selling Common Stock in the
Offering and will realize significant gains. See "Principal and Selling
Stockholders." Such selling stockholders would not be able to offer and sell
the Common Stock owned by them to the public unless there were a public
offering. The Offering will create a public market for the Common Stock, thus
allowing existing stockholders to sell Common Stock in the public market from
time to time pursuant to Rule 144 under the Securities Act of 1933, as amended
(the "Securities Act"), other exemptions from registration or pursuant to
subsequently filed registration statements. Existing stockholders, including
the Selling Stockholders, have obtained shares of Common Stock at prices
substantially less than the assumed initial public offering price. The average
price per share paid by existing stockholders is $2.99 as compared to an
assumed initial public offering price of $12.00 per share. The total
consideration paid by existing stockholders, including the Selling
Stockholders, for their shares of Common Stock is approximately $41.5 million,
which shares of Common Stock will have a market value of approximately $166.3
million based upon an assumed initial public offering price of $12.00 per
share. Thus, existing stockholders will have the benefit of an unrealized gain
in the value of their Common Stock of approximately $124.8 million assuming an
initial public offering price of $12.00 per share. See "Dilution."
CERTAIN AFFILIATIONS OF THE SELLING STOCKHOLDERS WITH THE COMPANY AND ONE OF
THE MANAGING UNDERWRITERS
Mr. Bump, an executive officer and a director of the Company, is a director
of Heerema, one of the Selling Stockholders, and the parent company of
Heerema. Mr. Waldvogel, a director of the Company, is a director and an
executive officer of Heerema. Prior to the Offering, Heerema owned 4,964,520
shares of Common Stock (or approximately 35.8% of the outstanding shares of
Common Stock), all of which shares are being offered in the Offering. The net
proceeds to Heerema from the sale of its shares of Common Stock in the
Offering are estimated to be approximately $55.4 million assuming an initial
public offering price of $12.00 per share. See "Principal and Selling
Stockholders."
Mr. Lawrence, a Managing Director of Dillon Read which is one of the
managing underwriters of the Offering, and Mr. Leidel, a Senior Vice President
of Dillon Read, are directors of the Company. Prior to the Offering, certain
private investment partnerships managed by Dillon Read and persons related to
Dillon Read (the Yorktown and Concord Investors) owned 4,223,040 shares of
Common Stock in the aggregate (or approximately 30.5% of the outstanding
shares of Common Stock), of which 1,035,480 shares are being offered in the
Offering. The net proceeds to the Yorktown and Concord Investors from the sale
of such 1,035,480 shares of Common Stock in the Offering are estimated to be
approximately $11.6 million assuming an initial public offering price of
$12.00 per share. After the Offering, the Yorktown and Concord Investors will
own 3,187,560 shares (or approximately 23.0% of the outstanding shares of
Common Stock). See "Principal and Selling Stockholders" and "Underwriting."
Under the Conduct Rules of the National Association of Securities Dealers,
Inc. (the "NASD"), when more than 10% of the net proceeds of a public offering
of equity securities, not including underwriting
9
<PAGE>
compensation, are to be paid to a member of the NASD participating in such
public offering of equity securities or an affiliate of such member, the price
at which the equity securities are distributed to the public must be no higher
than that recommended by a "qualified independent underwriter" meeting certain
standards. Dillon Read is a member of the NASD and under NASD regulations the
Yorktown and Concord Investors are deemed to be its affiliates. Certain of the
Yorktown and Concord Investors are Selling Stockholders in the Offering and as
a result will receive, in the aggregate, more than 10% of the net proceeds
from the Offering. As a result, the Offering is being made in compliance with
paragraph (8) of Rule 2710(c) of the Conduct Rules of the NASD which relates
to offerings where proceeds are directed to a member of the NASD. Merrill
Lynch & Co. will act as the qualified independent underwriter in connection
with the Offering and assume the customary responsibilities of acting as a
qualified independent underwriter in pricing and conducting due diligence for
the Offering. See "Underwriting."
DEPENDENCE ON KEY MANAGERS
The Company's success depends heavily on the continued services of its
senior management, who possess bidding, procurement, transportation,
logistics, planning, project management, risk management and financial skills.
The loss or interruption of services provided by one or more of its senior
officers could adversely affect the Company's results of operations.
Furthermore, there can be no assurance that the Company will continue to
attract and retain sufficient qualified personnel. See "Management."
RISKS ASSOCIATED WITH FIXED PRICE CONTRACTS
A substantial portion of the Company's projects are currently performed on a
fixed-price basis, although some projects are performed on a cost-plus or day-
rate basis or some combination of the foregoing. The Company attempts to cover
increased costs of anticipated changes in labor, material and service costs of
long-term contracts either through an estimation of such changes, which is
reflected in the original price, or through price adjustment clauses. Despite
these attempts, however, the revenue, cost and gross profit realized on a
fixed-price contract will often vary from the estimated amounts because of
unforseen conditions or changes in job conditions and variations in labor and
equipment productivity over the term of the contract. These variations and the
risks generally inherent in construction may result in gross profits realized
by the Company being different from those originally estimated and may result
in the Company experiencing reduced profitability or losses on projects.
Depending on the size of a project, these variations from estimated contract
performance could have a significant effect on the Company's operating results
for any quarter or year. In general, turnkey contracts to be performed on a
fixed-price basis involve an increased risk of significant variations, as a
result of the long-term nature of such contracts (and the inherent
difficulties in estimating costs) and the interrelationship of the integrated
services to be provided under such contracts (where unanticipated costs or
delays in performing part of the contract could have compounding effects by
increasing costs of performing other parts of the contract). See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business--Contract Provisions and Subcontracting."
RISKS ASSOCIATED WITH PERCENTAGE-OF-COMPLETION ACCOUNTING
The Company's contract revenues are recognized using the percentage-of-
completion method. Under this method, estimated contract revenues are accrued
based generally on the percentage that costs to date bear to total estimated
costs, taking into consideration physical completion. Estimated contract
losses are recognized in full when determined. Accordingly, contract revenues
and total cost estimates are reviewed and revised periodically as the work
progresses and as change orders are approved, and adjustments based upon the
percentage of completion are reflected in contract revenues in the period when
such estimates are revised. To the extent that these adjustments result in an
increase, a reduction or an elimination of previously reported contract
revenues, the Company would recognize a credit or a charge against current
earnings, which could be material. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--General."
OPERATIONAL RISKS
Pipeline construction, dredging, pipeline rehabilitation services, marine
support services and operation of vessels and heavy equipment involve a high
degree of operational risk. Natural disasters, adverse
10
<PAGE>
weather conditions, collisions, and operator or navigational error can cause
personal injury or loss of life, severe damage to and destruction of property
and equipment and suspension of operations. The occurrence of any such event
could result in revenue and casualty loss, increased costs and significant
liability to third parties. Litigation arising from such an occurrence may
result in the Company being named as a defendant in lawsuits asserting large
claims.
The Company maintains risk management and safety programs to mitigate the
effects of loss or damage. These programs have resulted in favorable loss
ratios and cost savings. While the Company maintains such insurance protection
as it deems prudent, there can be no assurance that any such insurance will be
sufficient or effective under all circumstances or against all hazards to
which the Company may be subject. An enforceable claim for which the Company
is not fully insured could have a material adverse effect on the Company.
Moreover, no assurance can be given that the Company will be able to maintain
adequate insurance in the future at rates that it considers reasonable. See
"Business--Insurance and Bonding."
GOVERNMENT REGULATIONS
Many aspects of the Company's operations are subject to government
regulations in the countries in which the Company operates, including those
relating to currency conversion and repatriation, taxation of its earnings and
earnings of its personnel, and its use of local employees and suppliers. In
addition, the Company depends on the demand for its services from the oil and
gas industry and, therefore, is affected by changing taxes, price controls and
laws and regulations relating to the oil and gas industry generally. The
adoption of laws and regulations by countries in which the Company operates,
curtailing exploration and development drilling for oil and gas for economic
and other policy reasons, could adversely affect the Company's operations by
limiting demand for its services. The Company's operations are also subject to
the risk of changes in foreign and domestic laws and policies which may impose
restrictions on the Company, including trade restrictions, which could have a
material adverse effect on the Company's operations. Other types of government
regulation which could, if enacted or implemented, adversely affect the
Company's operations include expropriation or nationalization decrees,
confiscatory tax rates, primary or secondary boycotts directed at specific
countries or companies, embargoes, extensive import restrictions or other
trade barriers, mandatory sourcing rules and unrealistically high labor rate
and fuel price regulation. The Company cannot determine to what extent future
operations and earnings of the Company may be affected by new legislation, new
regulations or changes in, or new interpretations of, existing regulations.
See "Business--Government Regulations--General."
ENVIRONMENTAL MATTERS
The Company's operations are subject to numerous environmental protection
laws and regulations which are complex and stringent. The Company regularly
works in and around sensitive environmental areas such as rivers, lakes and
wetlands. Significant fines and penalties may be imposed for non-compliance
with environmental laws and regulations, and certain environmental laws
provide for joint and several strict liability for remediation of releases of
hazardous substances, rendering a person liable for environmental damage,
without regard to negligence or fault on the part of such person. In addition
to potential liabilities that may be incurred in satisfying these
requirements, the Company may be subject to claims alleging personal injury or
property damage as a result of alleged exposure to hazardous substances. Such
laws and regulations may expose the Company to liability arising out of the
conduct of operations or conditions caused by others, or for the acts of the
Company which were in compliance with all applicable laws at the time such
acts were performed. The Company is not aware of any non-compliance with any
environmental law that could have a material adverse effect on the Company's
business or operations. See "Business--Government Regulations--Environmental."
11
<PAGE>
COMPETITION
The Company operates in a highly competitive environment. The Company
competes against government-owned or supported companies and other companies
that have financial and other resources substantially in excess of those
available to the Company. In certain markets, there is competition from
national and regional firms against which the Company may not be price
competitive. See "Business--Competition."
POLITICAL AND ECONOMIC RISKS
The Company has substantial operations and assets in developing countries in
Africa, Asia, the Middle East and South America, and is seeking to increase
its level of activity in the C.I.S. and Indonesia. Accordingly, the Company is
subject to risks which ordinarily would not be expected to exist in the United
States, Canada, Japan or western Europe, including foreign currency
restrictions (such as those which existed in Venezuela until earlier this
year), extreme exchange rate fluctuations (such as in Russia, Venezuela and
Nigeria), expropriation of assets, civil uprisings and riots, government
instability and legal systems of decrees, laws, regulations, interpretations
and court decisions which are not always fully developed and which may be
retroactively applied. The Company's operations in developing countries may be
adversely affected in that certain government agencies in such countries may
interpret laws, regulations or court decisions in a manner which might be
considered inconsistent or inequitable in the United States, Canada, Japan or
western Europe. The Company may be subject to unanticipated income taxes,
excise duties, import taxes, export taxes or other governmental assessments
which could have a material adverse effect on the Company's results of
operations for any quarter or year. See "--Concentration of Risk by Country"
and "Business--Geographic Regions."
The Company has attempted to mitigate the risks of doing business in
developing countries by separately incorporating its operations in many such
countries; having local partners in certain countries; contracting primarily
with major international oil companies; entering into contracts providing for
payment in U.S. dollars instead of the local currency where possible;
maintaining reserves for credit losses; maintaining insurance on equipment
against certain political risks and terrorism; and limiting its capital
investment in each country. The Company retains local advisors to assist it in
interpreting the laws, practices and customs of the countries in which the
Company operates. Given the unpredictable nature of the risks described in the
preceding paragraph, there can be no assurance that such risks will not result
in a loss of business which could have a material adverse effect on the
Company's results of operations for any quarter or year. See "Business."
TAX MATTERS
WGI is incorporated in Panama and is not a "controlled foreign corporation"
for purposes of U.S. tax law. WGI's Restated Articles of Incorporation contain
certain restrictions, subject to the determination by WGI's Board of Directors
in good faith and in its sole discretion, on the transfer of any shares of
Common Stock, to prevent WGI from becoming a "controlled foreign corporation"
under U.S. tax law. See "Description of Capital Stock--Common Stock" and "--
Possible Anti-takeover Provisions." Moreover, WGI and its non-U.S.
subsidiaries carry out their activities in a manner which the Company
believes, based upon the advice of its counsel, does not constitute the
conduct of a trade or business in the United States. Accordingly, although the
Company reports taxable income and pays taxes in the countries where it
operates, the Company believes, based upon such advice, that income earned by
WGI and its non-U.S. subsidiaries from operations outside the United States is
not reportable in the United States for tax purposes and is not subject to
U.S. income tax. If income earned, currently or historically, by WGI or its
non-U.S. subsidiaries from operations outside the United States constituted
income effectively connected to a United States trade or business and as a
result became taxable in the United States, the Company could be subject to
U.S. taxes on a basis significantly more adverse than generally would apply to
such business operations. In such event, the consolidated operating results of
the Company could be materially and adversely affected.
12
<PAGE>
NO PRIOR MARKET AND POSSIBLE VOLATILITY OF STOCK PRICE
Prior to the Offering, there has been no public market for the Company's
Common Stock. There can be no assurance that a regular trading market will
develop or be sustained after the Offering. The initial public offering price
will be determined by negotiations between the Company and the Managing
Underwriters. The market price of the Common Stock could be subject to
significant fluctuations in response to variations in operating results,
conditions in the oil and gas industry and other factors. In addition, the
stock market has in recent years experienced significant price and volume
fluctuations. These fluctuations often have been unrelated to the operating
performance of the specific companies whose stocks are traded. Broad market
fluctuations, as well as general economic conditions such as a recessionary
period or high interest rates, may adversely affect the market price of the
Company's Common Stock. See "Underwriting."
SHARES ELIGIBLE FOR FUTURE SALE
Future sales of Common Stock in the public market following the Offering
could adversely affect the market price of the Common Stock. Upon completion
of the Offering, the Company will have 13,860,000 shares of Common Stock
outstanding. Of these shares, the 6,000,000 shares sold in the Offering (plus
any additional shares sold upon exercise of the Underwriters' over-allotment
option) will, in general, be freely tradeable without restriction under the
Securities Act. Stockholders of the Company holding in the aggregate the
remainder of these shares (7,860,000 shares of Common Stock) have agreed,
subject to certain limited exceptions, not to sell or otherwise dispose of any
of the shares held by them as of the date of this Prospectus for a period of
180 days after the date of this Prospectus without the prior written consent
of Dillon Read. At the end of such 180 day period, all of these 7,860,000
shares of Common Stock will be eligible for immediate resale, subject, in some
cases, to compliance with Rule 144 and/or Rule 701 under the Securities Act.
The holders of approximately 6,054,240 shares of Common Stock have the right,
under certain circumstances, to require the Company to register their shares
under the Securities Act for resale to the public. If such holders, by
exercising their demand registration rights, cause a large number of shares to
be registered and sold in the public market, such sales could have an adverse
effect on the market price for the Common Stock. If the Company were required
to include in a Company-initiated registration shares held by such holders
pursuant to the exercise of their piggyback registration rights, such sales
may have an adverse effect on the Company's ability to raise additional
capital. In addition, soon after the date of this Prospectus, the Company
expects to file a registration statement on Form S-8 registering a total of
approximately 1,250,000 shares of Common Stock reserved for issuance under the
Company's 1996 Stock Plan and Director Plan. See "Shares Eligible for Future
Sale," "Underwriting," "Description of Capital Stock--Registration Rights" and
"Management--Compensation of Directors" and "--1996 Stock Plan."
USE OF PROCEEDS
The net proceeds to the Selling Stockholders from the sale of shares of
Common Stock in the Offering are estimated to be approximately $67.0 million
assuming an initial public offering price of $12.00 per share. The Company
will not receive any of the proceeds from the sale of shares of Common Stock
by the Selling Stockholders in the Offering. The Company will pay
substantially all of the fees and expenses (other than underwriting discounts
and commissions) of the Selling Stockholders incurred in connection with the
Offering.
If the Underwriters' over-allotment option granted by the Company is
exercised in full or in part, there will be proceeds to the Company. If
exercised in full, the net proceeds to the Company are estimated to be
approximately $9.2 million assuming an initial public offering price of $12.00
per share.
The net proceeds to the Company, if any, will be used as working capital, to
support expansion of operations in new work countries and to fund possible
acquisitions of assets and businesses which would complement the Company's
capabilities. Although the Company from time to time evaluates acquisition
opportunities, the Company has no present commitments or agreements with
respect to any material acquisition.
13
<PAGE>
DIVIDEND POLICY
In order to fund the development and growth of the Company's business
following the Offering, the Company intends to retain its earnings rather than
pay dividends in the foreseeable future. From 1987 through 1991, Willbros paid
$96.2 million in dividends out of excess cash to Heerema, its sole stockholder
at that time. Since 1991, the Company has not paid any dividends, except
dividends in 1996 on its outstanding shares of Preferred Stock. The Preferred
Stock will be converted into shares of Common Stock prior to the effectiveness
of the Registration Statement of which this Prospectus is a part. The
Company's present credit agreement prohibits the payment of dividends on
Common Stock.
CAPITALIZATION
The following table sets forth the capitalization of the Company as of March
31, 1996, adjusted to give effect to (a) the conversion of all outstanding
shares of the Company's Preferred Stock into shares of Common Stock prior to
the effectiveness of the Registration Statement of which this Prospectus is a
part, and (b) the 30-for-1 Common Stock split effected on May 27, 1996.
<TABLE>
<CAPTION>
MARCH 31, 1996
--------------
(IN THOUSANDS)
<S> <C>
Long-term debt................................................ $ -
Stockholders' equity:
Preferred Stock (1)(2)...................................... $ -
Class A Preferred Stock (1)................................. -
Common Stock (1)(2)(3)...................................... 693
Capital in excess of par value (3).......................... 41,224
Cumulative foreign currency translation adjustment.......... (784)
Retained earnings........................................... 46,440
Notes receivable for stock purchases........................ (2,363)
Treasury stock at cost...................................... (787)
-------
Total stockholders' equity................................ $84,423
-------
Total capitalization...................................... $84,423
=======
</TABLE>
- --------
(1) On May 27, 1996, the Company's Articles of Incorporation were amended and
restated to (a) authorize 1,000,000 shares of Class A Preferred Stock, par
value $.01 per share, (b) increase the number of authorized shares of
Common Stock to 35,000,000, (c) reduce the par value per share of the
Common Stock from $1.00 to $.05, and (d) allow a 30-for-1 Common Stock
split. There are 362,000 shares of Preferred Stock, $100.00 par value per
share, authorized. See "Description of Capital Stock."
(2) As of the date of this Prospectus, there are 13,860,000 shares of Common
Stock outstanding, after giving effect to the conversion of all
outstanding shares of Preferred Stock into shares of Common Stock. The
number of shares of Common Stock outstanding excludes (a) 900,000 shares
of Common Stock that may be sold by the Company upon exercise of the
Underwriters' over-allotment option, (b) 1,125,000 shares of Common Stock
reserved for issuance under the Company's 1996 Stock Plan, and (c) 125,000
shares of Common Stock reserved for issuance under the Company's Director
Stock Plan. See "Management --1996 Stock Plan" and "--Compensation of
Directors."
(3) If the Underwriters' over-allotment option is exercised in full, the
receipt of the estimated net proceeds from the sale by the Company of
900,000 shares of Common Stock in the Offering at an assumed initial
public offering price of $12.00 per share will be equal to $9,244,000 of
which $45,000 (equal to the par value of the shares issued) will be
recorded in Common Stock and $9,199,000 will be recorded in capital in
excess of par value.
14
<PAGE>
DILUTION
The net tangible book value of the Company at March 31, 1996, was $84.4
million or approximately $6.15 per share. Net tangible book value per share
represents the amount of total tangible assets less total liabilities of the
Company, divided by the number of shares of Common Stock outstanding, after
giving effect to the 30-for-1 Common Stock split and the conversion of all
outstanding shares of the Company's Preferred Stock into shares of Common
Stock. Assuming an initial public offering price per share in the Offering of
$12.00 per share, this represents an immediate dilution (i.e., the difference
between the initial public offering price per share and the net tangible book
value per share at March 31, 1996) of $5.85 per share to purchasers of the
shares of Common Stock offered hereby. The following table illustrates this
per share dilution:
<TABLE>
<S> <C>
Assumed initial public offering price per share...................... $12.00
Net tangible book value per share at March 31, 1996.................. 6.15
------
Dilution per share to new investors in the Offering (1).............. $ 5.85
======
</TABLE>
- --------
(1) If the Underwriters' over-allotment option is exercised in full, dilution
per share to new investors would be $5.60.
15
<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
The selected consolidated statement of income, cash flow and balance sheet
data set forth below for and at the end of each of the years in the five-year
period ended December 31, 1995, are derived from the audited Consolidated
Financial Statements of Willbros examined by KPMG Peat Marwick, independent
public accountants, of which the Consolidated Balance Sheets as of December
31, 1994 and 1995, and the Consolidated Statements of Income, Stockholders'
Equity and Cash Flows for the years ended December 31, 1993, 1994 and 1995,
are included elsewhere in this Prospectus. The data for 1992 and subsequent
periods reflects purchase accounting; therefore, it is presented on a
different cost basis than that of the Predecessor Company. The selected
consolidated statement of income, cash flow and balance sheet data set forth
below for and at the end of each of the three months ended March 31, 1995 and
1996, are derived from the unaudited Consolidated Financial Statements of the
Company included elsewhere in this Prospectus. In the opinion of management,
these interim period financial statements have been prepared on the same basis
as the audited Consolidated Financial Statements and include all adjustments,
none of which were other than normal recurring accruals, necessary for the
fair presentation of financial position and results of operations. The results
for the three months ended March 31, 1996, are not necessarily indicative of
the results to be achieved for the full year. The selected consolidated
statement of income, cash flow and balance sheet data should be read in
conjunction with the Consolidated Financial Statements and the related Notes
thereto included elsewhere in this Prospectus and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
<TABLE>
<CAPTION>
PREDECESSOR
COMPANY (1) COMPANY
------------ ----------------------------------------------------------
THREE MONTHS
YEAR ENDED YEAR ENDED DECEMBER 31, ENDED MARCH 31,
DECEMBER 31, -------------------------------------- ------------------
1991 1992 1993 1994 1995 1995 1996
------------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME
DATA:
Contract revenues...... $168,875 $180,947 $210,011 $145,716 $220,506 $ 36,001 $ 53,479
Operating expenses:
Contract cost.......... 124,925 127,942 147,991 98,700 161,584 25,594 41,204
Depreciation and
amortization.......... 14,272 15,029 16,672 14,598 15,193 3,634 3,190
General and
administrative........ 19,098 20,200 24,267 24,695 28,184 6,232 6,698
-------- -------- -------- -------- -------- -------- --------
Operating Income....... 10,580 17,776 21,081 7,723 15,545 541 2,387
Net interest income
(expense)............. 1,062 (2,133) (785) 835 144 162 (140)
Minority interest...... (1,408) (1,014) (3,615) (1,758) (1,589) (238) (490)
Other income
(expense)............. 3,681 176 5,567 113 (381) 117 570
-------- -------- -------- -------- -------- -------- --------
Income before income
taxes................. 13,915 14,805 22,248 6,913 13,719 582 2,327
Provision for income
taxes................. 4,289 2,764 8,405 (4,146) (75) 465 283
-------- -------- -------- -------- -------- --------
Net income (2)......... 11,636 $ 12,041 $ 13,843 $ 11,059 $ 13,794 $ 117 $ 2,044
======== ======== ======== ======== ======== ========
Net income per share... N/A(1) $ .92 $ 1.00 $ .79 $ .97 $ .01 $ .09(3)
CASH FLOW DATA:
Cash provided by (used
in):
Operating activities... $ 18,502 $ 40,896 $ 66,460 $ (3,771) $ (8,396) $ (7,864) $ 5,969
Investing activities... (20,118) (83,875) (14,621) (13,169) (18,558) (3,960) (1,983)
Financing activities... 7,734 41,758 (8,175) (1,271) (2,321) (515) (1,557)
OTHER DATA:
EBITDA (4)............. $ 30,366 $ 33,257 $ 40,752 $ 22,881 $ 30,631 $ 4,649 $ 5,871
Capital expenditures... $ 20,150 $ 15,047 $ 16,534 $ 7,171 $ 18,946 $ 4,225 $ 2,160
Backlog (5)............ $146,734 $160,565 $ 76,066 $ 97,493 $139,359 $139,407 $104,524
Employees.............. 2,080 3,090 1,870 2,030 3,110 2,630 3,520
BALANCE SHEET DATA (AT
PERIOD END): (6)
Cash and cash
equivalents........... $ 25,855 $ 24,080 $ 67,346 $ 49,142 $ 19,859 $ 36,803 $ 22,288
Working capital........ 33,458 14,481 20,663 28,390 38,767 27,403 40,977
Total assets........... 116,926 118,831 152,059 131,188 149,954 128,155 143,712
Total debt............. 10,000 16,000 6,639 5,828 3,119 5,334 2,574
Stockholders' equity... 59,820 45,021 59,774 68,970 83,391 69,066 84,423
</TABLE>
- --------
(1) Effective for accounting purposes as of January 1, 1992, the Company's
then parent company was sold to a group of investors which included
Company management, the Yorktown and Concord Investors and Heerema. As a
result of the acquisition of the Predecessor Company by the Company, the
consolidated financial statements of the Company reflect the application
of purchase accounting and, accordingly, are presented on a different
basis than those of the Predecessor Company and, therefore, are not
comparable. See "Business--Willbros Background."
(2) Net income in 1991 includes a $1,457 gain on discontinuation of Willbros'
U.S. contract drilling business and a $553 extraordinary item for the tax
benefit of a net operating loss carryforward.
(3) After deducting $724 of dividends on the Company's Preferred Stock.
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(4) EBITDA represents earnings before interest expense, income taxes,
depreciation and amortization. EBITDA is not intended to represent cash
flows for the period, nor has it been presented as an alternative to
operating income as an indicator of operating performance. It should not
be considered in isolation or as a substitute for measures of performance
prepared in accordance with generally accepted accounting principles. See
the Company's Consolidated Statements of Cash Flows in the Company's
Consolidated Financial Statements included elsewhere in this Prospectus.
EBITDA is included in this Prospectus because it is a basis upon which the
Company assesses its financial performance.
(5) The Company follows a practice of reflecting anticipated revenues from
uncompleted portions of existing contracts as backlog. Historically, a
substantial amount of the Company's revenues in a given year have not been
reflected in its backlog at the beginning of that year. On average, over
the past four years, actual annual revenues have exceeded 150% of backlog
recorded at the end of each preceding year. No assurance can be given that
future experience will be similar to historical results in this respect.
See "Business--Backlog."
(6) Unless the Underwriters' over-allotment option granted by the Company is
exercised, the Company will not receive any proceeds from the Offering.
Accordingly, no adjustment to the balance sheet to reflect the Offering is
shown. See "Use of Proceeds."
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion is intended to provide an analysis of the Company's
results of operations, capital structure and resources and should be read in
conjunction with the Company's Consolidated Financial Statements included
elsewhere in this Prospectus and "Selected Consolidated Financial and Other
Data."
GENERAL
The Company derives its revenues from providing construction services,
engineering services and specialty services to the oil and gas industry and
government entities worldwide. The Company obtains contracts for its work
primarily by competitive bidding or through negotiations with long standing
clients. Bidding activity, backlog and revenues resulting from the award of
contracts to the Company may vary significantly from period to period. See
"Business--Backlog."
A number of factors relating to the Company's business affect the Company's
recognition of contract revenues. Revenues from fixed price construction and
engineering contracts are recognized on the percentage-of-completion method.
Under this method, estimated contract revenues are accrued based generally on
the percentage that costs to date bear to total estimated costs, taking into
consideration physical completion. Generally, the Company does not recognize
income until a contract is approximately 10% complete. Costs which are
considered to be reimbursable are excluded before the percentage-of-completion
calculation is made. Accrued revenues pertaining to reimbursables are limited
to the cost of the reimbursables. If a current estimate of total contract cost
indicates a loss on a contract, the projected loss is recognized in full when
determined. Revenues from unit-price contracts are recognized as earned.
Revenues from change orders, extra work, variations in the scope of work and
claims are recognized when realization is assured.
The Company derives its revenues from contracts with durations from a few
weeks to several months and sometimes years. Unit-price contracts provide
relatively even quarterly results; however, major projects are usually fixed-
price contracts that may result in uneven quarterly financial results due to
the method by which revenues are recognized. These financial factors, as well
as external factors such as weather, client needs, labor, governmental
regulation and politics may affect the progress of a project's completion and
the timing of revenue recognition. The Company believes that its operating
results should be evaluated over a sufficiently long time horizon over which
major contracts in progress are completed and change orders, extra work,
variations in the scope of work and claims are negotiated and realized.
As previously discussed, the Company uses EBITDA as part of its overall
assessment of financial performance by comparing EBITDA between accounting
periods. Management believes that EBITDA is used by the financial community as
one way of measuring performance of companies in a peer group and in
evaluating the market value of companies.
While the Company's revenues, operating income and EBITDA for the three
months ended March 31, 1996, are higher than those for the comparable period
in the prior year, no assurance can be given that the Company's revenues,
operating income and EBITDA for the full year 1996 will not be lower than
revenues, operating income and EBITDA for the full year 1995. Backlog as of
March 31, 1996, was $104.5 million, as compared to $139.4 million as of March
31, 1995, a decrease of $34.9 million. See "Business--Backlog."
RESULTS OF OPERATIONS
Three Months Ended March 31, 1996, Compared to Three Months Ended March 31,
1995
Contract Revenues. Contract revenues increased to $53.5 million for the
three months ended March 31, 1996, from $36.0 million for the comparable
period in 1995. The $17.5 million (49%) increase is primarily attributable to
(a) a $14.4 million increase in contract revenues in Africa related to
construction of a 20 inch gas pipeline river crossing and related facilities
and specialty services associated with construction of swamp flow lines,
flowline leak repair, dredging and material procurement in Nigeria; (b) an
$8.9 million increase in contract revenues in Asia due to engineering,
material procurement and construction services related to a 16-18 inch, 225
mile (365 kilometer) pipeline and four pump stations in Pakistan; offset by
(c) a $4.3 million decrease in contract revenues in North America due to
reduced material procurement and construction services in the United States.
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Contract Cost. Contract cost increased to $41.2 million for the three months
ended March 31, 1996, from $25.6 million for the comparable period in 1995.
The $15.6 million (61%) increase is primarily attributable to (a) a $10.5
million increase in contract cost in Africa associated with construction and
specialty services in Nigeria; (b) a $9.1 million increase in contract cost in
Asia due to engineering, material procurement and construction services in
Pakistan; offset by (c) a $3.4 million decrease in contract cost in North
America due to reduced material procurement and construction services in the
United States.
Depreciation and Amortization. Depreciation and amortization expense
decreased to $3.2 million for the three months ended March 31, 1996, from $3.6
million for the comparable period in 1995, due primarily to certain assets
becoming fully depreciated.
General and Administrative. General and administrative expense increased to
$6.7 million for the three months ended March 31, 1996, from $6.2 million for
the comparable period in 1995, due primarily to increased costs associated
with the increased level of activity in Africa.
Operating Income. Operating income increased to $2.4 million for the three
months ended March 31, 1996, from $.5 million for the comparable period in
1995. The $1.9 million (380%) increase was primarily attributable to (a) a
$3.3 million increase in Africa related to increased construction and
specialty services, offset by (b) a $1.1 million decrease in the Middle East
due to reduced specialty services.
Net Interest Income (Expense). Net interest income decreased to an expense
of $.1 million for the three months ended March 31, 1996, from income of $.2
million for the comparable period in 1995, due primarily to a decrease in
interest income on short-term investments.
Minority Interest Expense. Minority interest expense increased to $.5
million for the three months ended March 31, 1996, from $.2 million for the
comparable period in 1995, due to increased revenues in certain work
countries.
Other Income (Expense). Other income increased to $.6 million for the three
months ended March 31, 1996, from $.1 million for the comparable period in
1995, due primarily to an increase in foreign exchange gains.
Provision (Credit) for Income Taxes. The provision for income taxes
decreased to $.3 million for the three months ended March 31, 1996, from $.5
million for the comparable period in 1995, principally due to a reduction in
previous estimates of income taxes in certain countries.
Year Ended December 31, 1995, Compared to Year Ended December 31, 1994
Contract Revenues. Contract revenues increased to $220.5 million for the
year ended December 31, 1995, from $145.7 million in 1994. The $74.8 million
(51%) increase is primarily attributable to (a) a $29.7 million increase in
contract revenues in Asia from the start of the engineering, material
procurement and construction services related to a 16-18 inch, 225 mile (365
kilometer) pipeline and four pump stations in Pakistan; (b) a $27.1 million
increase in contract revenues in Africa related to specialty services
associated with dredging, pipe coating and material procurement in Nigeria;
(c) a $14.8 million increase in contract revenues in South America related to
fabrication and installation of concrete piles and platforms and other
specialty services in Venezuela; (d) a $7.0 million increase in contract
revenues in North America associated with construction of a 20 inch, 130 mile
(205 kilometer) gas pipeline in the United States; partially offset by (e) a
$2.6 million decrease in contract revenues in Oman due to reduced speciality
services.
Contract Cost. Contract cost increased to $161.6 million for the year ended
December 31, 1995, from $98.7 million in 1994. The $62.9 million (64%)
increase is primarily attributable to (a) a $30.0 million increase in contract
cost in Asia due to engineering, material procurement and construction
services in Pakistan; (b) a $22.7 million increase in contract cost in Africa
associated with specialty services in Nigeria; and (c) a $6.3 million increase
in contract cost in South America related to increased construction and
specialty services in Venezuela.
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<PAGE>
Depreciation and Amortization. Depreciation and amortization expense
increased to $15.2 million for the year ended December 31, 1995, from $14.6
million in 1994, due primarily to equipment and spare parts additions in 1995
of $18.9 million (compared to $7.2 million in 1994).
General and Administrative. General and administrative expense increased to
$28.2 million for the year ended December 31, 1995, from $24.7 million in
1994, due primarily to increased costs associated with new contracts in Africa
and South America and the opening of a new office in Asia.
Operating Income. Operating income increased to $15.5 million for the year
ended December 31, 1995, from $7.7 million in 1994. The $7.8 million (101%)
increase was primarily attributable to (a) a $6.8 million increase in South
America related to increased specialty services; (b) a $3.2 million increase
in Africa related to increased specialty services; (c) a $2.8 million increase
in North America related to increased construction contracts and engineering
margins; offset by (d) a $4.6 million decrease in the Middle East due to
reduced specialty services.
Net Interest Income (Expense). Net interest income decreased to $.1 million
for the year ended December 31, 1995, from $.8 million in 1994, due primarily
to reduced interest income on short-term investments.
Minority Interest Expense. Minority interest expense decreased to $1.6
million for the year ended December 31, 1995, from $1.8 million in 1994, due
to decreased activity in certain work countries.
Other Income (Expense). Other income decreased to an expense of $.4 million
for the year ended December 31, 1995, from income of $.1 million in 1994, due
primarily to a foreign exchange loss.
Provision (Credit) for Income Taxes. The credit for income taxes decreased
to a credit of $.1 million for the year ended December 31, 1995, from a credit
of $4.1 million in 1994, principally due to increased taxable income in 1995
and a lesser reduction in 1995 than in 1994 in previous estimates of income
taxes in certain countries.
Year Ended December 31, 1994, Compared to Year Ended December 31, 1993
Contract Revenues. Contract revenues decreased to $145.7 million for the
year ended December 31, 1994, from $210.0 million in 1993. The $64.3 million
(31%) decrease was primarily attributable to (a) a $36.5 million decrease in
contract revenues in the Middle East due to the substantial completion in 1993
of a flowline construction contract in Kuwait and an engineering, material
procurement and construction contract in Oman, offset by an increase in
pipeline maintenance contracts in Oman; (b) an $18.3 million decrease in
contract revenues in Africa due to substantial completion in 1993 of pipeline
construction contracts, offset by increased flowline, pipe coating and
material procurement, equipment rental and dredging work in Nigeria; (c) a
$13.4 million decrease in contract revenues in North America due to reduced
construction services, in the United States; partially offset by (d) a $4.7
million increase in contract revenues in Venezuela resulting from the
acquisition of CAMSA.
Contract Cost. Contract cost decreased to $98.7 million for the year ended
December 31, 1994, from $148.0 million in 1993. The $49.3 million (33%)
decrease was primarily attributable to (a) a $28.8 million decrease in
contract cost in the Middle East associated with a reduction in construction
services in Kuwait and Oman; (b) a $17.7 million decrease in contract cost in
Africa due to reduced construction services in Nigeria; (c) a $9.0 million
decrease in contract cost in North America due to reduced construction
services in the United States; partially offset by (d) a $5.5 million increase
in contract cost in South America due to new business activities resulting
from the acquisition of CAMSA.
Depreciation and Amortization. Depreciation and amortization expense
decreased to $14.6 million for the year ended December 31, 1994, from $16.7
million in 1993, due primarily to full amortization of certain spare parts in
1993.
20
<PAGE>
General and Administrative. General and administrative expense increased to
$24.7 million for the year ended December 31, 1994, from $24.3 million in 1993
due primarily to the acquisition of CAMSA, offset by decreased activity in
other areas. See "Certain Transactions."
Operating Income. Operating income decreased to $7.7 million for the year
ended December 31, 1994, from $21.1 million in 1993. The $13.4 million (63%)
decrease was primarily attributable to (a) a $6.9 million decrease in the
Middle East related to decreased construction services; (b) a $3.9 million
decrease in North America due to reduced construction services; (c) a $2.3
million decrease in South America due to new business activities resulting
from the acquisition of CAMSA; offset by (d) a $1.5 million increase in Africa
due to increased specialty services.
Net Interest Income (Expense). Net interest income increased to income of
$.8 million for the year ended December 31, 1994, from expense of $.8 million
in 1993 due to increased interest income on short-term investments and reduced
interest expense on short-term borrowing.
Minority Interest Expense. Minority interest expense decreased to $1.8
million for the year ended December 31, 1994, from $3.6 million in 1993 due to
decreased activity in certain work countries.
Other Income (Expense). Other income decreased to $.1 million for the year
ended December 31, 1994, from $5.6 million in 1993 due to a decrease in
foreign exchange gains.
Provision (Credit) for Income Taxes. The provision for income taxes
decreased to a credit of $4.1 million for the year ended December 31, 1994,
from an expense of $8.4 million in 1993 principally due to a reduction in
previous estimates of income taxes in certain countries.
EFFECT OF INFLATION AND CHANGING PRICES; FOREIGN EXCHANGE RISK MANAGEMENT
The Company's operations are affected by increases in prices, whether caused
by inflation, government mandates or other economic factors in the countries
in which it operates. The Company attempts to recover anticipated increases in
the cost of labor, fuel and materials through price escalation provisions in
certain of its major contracts or by considering the estimated effect of such
increases when bidding or pricing new work.
The Company attempts to negotiate contracts which provide for payment in
U.S. dollars, but it may be required to take all or a portion of payment under
a contract in another currency. To mitigate non-U.S. currency exchange risk,
the Company seeks to match anticipated non-U.S. currency revenues with
expenses in the same currency. To the extent it is unable to match non-U.S.
currency revenues with expenses in the same currency, the Company may use
forward contracts, options or other common hedging techniques in the same non-
U.S. currencies. As a result of the Company's foreign exchange risk management
measures, aggregate foreign exchange gains during the last five years have
exceeded aggregate foreign exchange losses during the same period. There can
be no assurance that this strategy will continue to be successful in the
future.
CAPITAL STRUCTURE, LIQUIDITY AND CAPITAL RESOURCES
The Company's primary requirements for capital are to fund the acquisition,
upgrade and maintenance of its equipment, provide working capital for current
projects, finance the mobilization of employees and equipment to new projects
and establish a presence in countries where the Company perceives growth
opportunities. During the period 1993 through 1995, the Company met its cash
requirements primarily from operating cash flow (excluding interest income and
changes in operating assets and liabilities) of $81.0 million (87% of total
requirements), interest income from investments of $5.1 million (6%) and use
of cash reserves of $4.6 million (5%). There was a net reduction in bank
borrowings of $13.8 million during this period.
Cash and cash equivalents decreased to $19.9 million for the year ended
December 31, 1995, from $49.1 million in 1994. The $29.2 million (59%)
decrease is primarily due to a $39.6 million increase in working capital
(excluding cash and cash equivalents) and $18.6 million in net capital
expenditures for property, equipment and spare parts, offset by $29.0 million
of cash flow from operations.
The Company has a $100 million line of credit under a credit agreement with
several financial institutions and Bank of America National Trust and Savings
Association, as agent. This credit agreement
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provides a revolving credit facility and a standby and commercial letter of
credit facility. The aggregate of all loans, together with all commercial and
financial letters of credit issued under the agreement, may not exceed the
Company's tangible net worth as defined in the credit agreement ($89.5 million
at March 31, 1996). Principal is payable at termination (October 31, 1997) and
interest is payable quarterly at a reference rate plus 50 basis points or, at
the Company's option, other alternative interest rates. The annual commitment
fee is 3/8% on the unused portion of the line. The Company's obligations under
its credit agreement are secured by the stock of the principal subsidiaries of
the Company. At March 31, 1996, there were no borrowings, financial letters of
credit or commercial letters of credit outstanding, and standby letters of
credit outstanding totaled $28.1 million, leaving $71.9 million available
under this facility. The credit agreement requires the Company to maintain
certain financial ratios, restricts dividend payments on Common Stock and
limits, among other things, the Company's ability to purchase its own stock
and its ability to make acquisitions. The credit agreement limits the value of
acquisitions to an annual maximum of 20% of tangible net worth and requires
that such acquisitions be made with cash or stock. The Company intends to
renegotiate its credit agreement in the fourth quarter of 1996 in order that
these limitations not significantly restrict its ability to implement its
business strategy. No assurance can be given that this agreement can be so
renegotiated. The Company is currently in compliance with all of the terms of
its credit agreement.
The Company has credit facilities in certain countries outside the United
States. Borrowings under these lines, in the form of short-term notes and
overdrafts, are made at competitive local interest rates. Generally, each line
is available only for borrowings related to operations in a specific country.
At March 31, 1996, there was an aggregate of $2.6 million outstanding and $1.7
million available under these facilities. The Company's credit agreement
limits the Company's ability to borrow from sources outside the agreement to
20% of tangible net worth.
If the Underwriters' over-allotment option granted by the Company is
exercised in full or in part, resulting in proceeds to the Company, it is
anticipated that the net proceeds therefrom will be used for working capital,
to support expansion of operations and for possible acquisitions of assets and
businesses. The Company believes that cash flow from operations and borrowing
under existing credit facilities will be sufficient to finance working capital
and capital expenditures for ongoing operations at least through the end of
1996. The Company estimates capital expenditures for equipment and spare parts
of approximately $20 million during 1996.
RECENTLY ISSUED ACCOUNTING STANDARDS
The Company does not believe the adoption, in 1996, of Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" will have a
significant effect on its consolidated financial position or consolidated
results of operations.
The Company does not plan to adopt the fair value-based measurement
methodology for employee and director stock options contemplated by Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation." Accordingly, this Standard is not expected to have a
significant effect on the Company's consolidated financial position or
consolidated results of operations.
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<PAGE>
BUSINESS
GENERAL
The Company is one of the leading independent contractors serving the oil
and gas industry, providing construction services, engineering services and
specialty services to industry and government entities worldwide. The Company
places particular emphasis on projects in developing countries where the
Company believes its experience gives it a competitive advantage. The
Company's construction services include the building and replacement of major
pipelines and gathering systems, flow stations, pump stations, gas compressor
stations, gas processing facilities and oil and gas production facilities; and
the construction of piers, dock facilities and bridges. The Company's
engineering services include feasibility studies; conceptual and detailed
design; field services; material procurement; and overall project management.
The Company's specialty services include dredging; pipe coating; pipe double
jointing; removal and installation of flowlines; the fabrication and
installation of concrete piles and platforms; maintenance and repair of
pipelines, stations and facilities; pipeline rehabilitation; and transport of
oilfield equipment, rigs and vessels.
The Company provides its services through a large fleet of equipment
comprised of, among other things, marine vessels, barges, dredges, pipelaying
equipment, heavy construction equipment, transportation equipment and camp
equipment. The Company's equipment fleet is supported by warehouses of spare
parts and tools which are located to maximize availability and minimize cost.
The Company obtains contracts for its work primarily by competitive bidding
or through negotiations with long-standing clients. In evaluating bid
opportunities, the Company considers such factors as the client, the
geographic location and the difficulty of the work, the Company's current and
projected workload, including the availability of personnel and Company owned
equipment, the likelihood of additional work, the project's cost and
profitability estimates and the Company's competitive advantage relative to
other likely bidders.
The Company traces its roots to the construction business of Williams
Brothers Company, founded in 1908. Through successors to that business,
Willbros has completed many landmark projects around the world, including the
"Big Inch" and "Little Big Inch" War Emergency Pipelines (1942-44), the Mid-
America Pipeline (1960), the TransNiger Pipeline (1962-64), the Trans-
Ecuadorian Pipeline (1970-72), the northernmost portion of the Trans-Alaskan
Pipeline System (1974-76), the All American Pipeline System (1984-86),
Colombia's Alto Magdalena Pipeline System (1989-90) and a portion of the
Pacific Gas Transmission System expansion (1992-93). Willbros has been
involved in nine of the ten largest gas pipeline projects undertaken in the
United States since 1988. See "--Willbros Milestones."
Over the years, Willbros has been employed by more than 400 clients to carry
out work in over 50 countries. Within the past 10 years, Willbros has worked
in Africa, Asia, the C.I.S., the Middle East, North America and South America.
Willbros' relatively steady base of ongoing construction, engineering and
specialty services operations in Nigeria, Oman, the United States and
Venezuela has been enhanced by major construction and engineering projects in
Abu Dhabi, Colombia, Ecuador, Egypt, Gabon, Kuwait, Morocco, Nigeria, Oman,
Pakistan and the United States.
Representative clients (or affiliates of clients) of the Company include the
Caspian Pipeline Consortium (see "--C.I.S."); Royal Dutch Shell; Chevron
Corp.; Kuwait Oil Company; U.S. Army; Pacific Gas & Electric; Petroleum
Development Oman; Enron Corp.; Petroleos de Venezuela S.A. ("PDVSA");
Occidental Petroleum; PanEnergy Corp; Great Lakes Gas Transmission Company;
E.N.I.; Nigerian National Petroleum Corporation ("NNPC"); and the Pak-Arab
Refinery, Ltd. Private clients such as Shell have historically accounted for
the majority of the Company's revenues. Government entities and agencies such
as the U.S. Army, Kuwait Oil Company and PDVSA have accounted for the
remainder.
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CURRENT MARKET CONDITIONS
Relatively high crude oil and natural gas prices have resulted in
correspondingly strong levels of current and projected capital expenditures by
oil and gas companies to explore for and produce oil and gas reserves.
Accordingly, many significant natural gas, crude oil and petroleum products
pipeline projects and LNG projects, together with ancillary construction and
other associated projects, are being undertaken, particularly in developing
countries or regions where energy infrastructure spending has lagged.
The Company believes that certain of these projects will meet its bidding
criteria, and that the Company's worldwide pipeline construction, engineering
and specialty services experience place it in an advantageous position to
compete for such projects. The Company currently has approximately 70 bids
outstanding with respect to potential contract awards in Australia, China,
Egypt, Indonesia, Mexico, Nigeria, Oman, Russia, Saudi Arabia, the United
States and Venezuela. The Company is currently preparing bids with respect to
potential contract awards in Egypt, Indonesia, Nigeria, Oman, Saudi Arabia,
Tanzania and the United States. Finally, the Company expects to prepare and
submit bids with respect to certain other potential construction and
engineering projects in Africa, Asia, the C.I.S., the Middle East, North
America and South America before the end of 1996.
BUSINESS STRATEGY
The Company historically pursued a strategy of maximizing stockholder
returns while maintaining a strong balance sheet. More recently, the Company
has emphasized a growth strategy which encompasses geographic expansion in
areas such as Pakistan and Indonesia, strategic alliances, acquisitions and
quality improvements. In pursuing this strategy, the Company relies on its
competitive advantage in completing logistically complex and technically
difficult projects in remote areas with difficult terrain and harsh climatic
conditions. The Company also relies on its experienced multinational work
force of approximately 3,520 employees, over 80% of whom are citizens of the
respective countries in which they work.
Geographic Expansion. The Company seeks to maintain its presence in regions
where it has previously developed a strong base of operations, such as Africa,
the Middle East, North America and South America, and to establish a presence
in additional strategically important locations, such as Russia, Pakistan,
Indonesia, Egypt and Brazil. In pursuing this strategy, the Company seeks to
identify a limited number of long-term niche markets in which the Company can
outperform the competition and establish an advantageous position.
Strategic Alliances. The Company seeks to establish strategic alliances with
companies whose resources, skills and strategies are complementary to and are
likely to enhance the Company's business opportunities, including the
formation of joint ventures and consortia to achieve competitive advantage and
share risks. Such alliances have already been established in Australia,
Indonesia, Malaysia, Mexico, Russia, Thailand, the United States and
Venezuela. As an example of this strategy, the Company has entered into a
Joint Development Agreement with a unit of British Gas plc to promote the
utilization of an epoxy-filled pipeline repair sleeve developed by British Gas
and offer a full range of pipeline rehabilitation services to the oil and gas
industry, including assessment and rehabilitation construction services. As a
related strategy, the Company may decide to seek an equity stake in a project
in order to enhance its competitive position and/or maximize project returns.
Acquisitions. The Company seeks to identify and acquire companies which
complement its business strategy. For example, in 1994 the Company acquired
(from an affiliate of Heerema), CAMSA, a company operating in the Lake
Maracaibo area of Venezuela whose primary expertise is in marine construction
and the fabrication and installation of concrete piles and platforms for
offshore projects. See "Certain Transactions." The Company will continue to
evaluate acquisition candidates that offer growth opportunities and the
ability to complement the Company's resources and capabilities.
Quality Improvements. The Company's quality improvement program is focused
on obtaining ISO 9000 certification and on continually improving the
readiness, utilization and overall quality of its fleet
24
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of equipment. ISO 9000 is an internationally recognized verification system
for quality management overseen by the International Standards Organization
based in Geneva, Switzerland. The ISO 9000 certification is important to the
Company's international operations in that in recent years such certification
has been made a criterion for prequalification of contractors by certain
potential clients, and this trend is expected to continue. The certification
process involves a rigorous review and audit of the Company's management
processes and quality control procedures. During the first half of 1996, five
of the Company's subsidiaries achieved ISO 9000 certification. The Company's
Nigerian subsidiary is on schedule to achieve certification by the end of
1996.
Conservative Financial Management. The Company expects to continue to
emphasize the maintenance of a conservative balance sheet in order to finance
the development and growth of its business. The Company also seeks to obtain
contracts that are likely to result in recurring revenues in order to mitigate
the cyclical nature of its construction and engineering businesses. For
example, the Company generally seeks to obtain specialty services contracts of
more than one year in duration. Additionally, the Company acts to minimize its
exposure to currency fluctuations through the use of U.S. dollar-denominated
contracts, by limiting payments in local currency to approximately the amount
of local currency expenses, and otherwise by hedging activities such as
purchasing forward exchange contracts.
WILLBROS BACKGROUND
The Company is the successor to the pipeline construction business of
Williams Brothers Company which was started in 1908 by Miller and David
Williams. In 1949, the business was reconstituted and acquired by the next
generation of the Williams family. The resulting enterprise eventually became
The Williams Companies, Inc., a major U.S. interstate natural gas and
petroleum products pipeline company ("Williams").
In 1975, Williams elected to discontinue its pipeline construction
activities and, in December 1975, sold substantially all of the non-U.S.
assets and entities comprising its pipeline construction division to a newly
formed Panama corporation (eventually renamed "Willbros Group, Inc.") owned by
employees of the division. In 1979, Willbros Group, Inc. retired its debt
incurred in the acquisition by selling a 60% equity stake to Heerema. In 1986,
Heerema acquired the balance of Willbros Group, Inc., which then operated as a
wholly owned subsidiary of Heerema until April 1992.
In April 1992, Heerema sold Willbros Group, Inc. to a corporation formed by
members of the Company's management, the Yorktown and Concord Investors and
Heerema. Subsequently, the original Willbros Group, Inc. was dissolved into
the acquiring corporation which was renamed "Willbros Group, Inc."
The term "Willbros," as used in this Prospectus, includes the Company, the
original Willbros Group, Inc. and their predecessors in the pipeline
construction business, as described above.
WILLBROS MILESTONES
The following are selected milestones which Willbros has achieved:
1939 Executed its first international pipeline project in Venezuela.
1942-44
Principal contractor on the "Big Inch" and "Little Big Inch" War
Emergency Pipelines which delivered U.S. Gulf Coast crude oil to the
Eastern Seaboard.
1947-48
Built the 370 mile (600 kilometer) Camiri to Sucre and Cochabamba
crude oil pipeline in Bolivia.
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1951
Completed the 400 mile (645 kilometer) western segment of the Trans-
Arabian Pipeline System in Jordan, Syria and Lebanon.
1954-55
Built Alaska's first major pipeline system, consisting of 625 miles
(1,000 kilometers) of petroleum products pipeline, housing,
communications, two tank farms, five pump stations and marine dock and
loading facilities.
1956-57
Led a joint venture which constructed the 335 mile (535 kilometer)
southern section of the Trans-Iranian Pipeline, a products pipeline
system extending from Abadan to Tehran.
1958 Constructed pipelines and related facilities for the world's largest
oil export terminal at Kharg Island, Iran.
1960
Built the first major liquified petroleum gas pipeline system, the
2,175 mile (3,480 kilometer) Mid-America Pipeline in the United
States, including six delivery terminals, two operating terminals, 13
pump stations, communications and cavern storage.
1962 Began operations in Nigeria with the commencement of construction of
the TransNiger Pipeline, a 170 mile (275 kilometer) crude oil
pipeline.
1964-65
Built the 390 mile (625 kilometer) Santa Cruz to Sica Sica crude oil
pipeline in Bolivia. The highest altitude reached by this line is
14,760 feet (4,500 meters) above sea level, which management believes
is higher than the altitude of any other pipeline in the world.
1965 Began operations in Oman with the commencement of construction of the
175 mile (280 kilometer) Fahud to Muscat crude oil pipeline system.
1967-68
Built the 190 mile (310 kilometer) Orito to Tumaco crude oil pipeline
in Colombia, one of five Willbros crossings of the Andes mountains, a
project notable for the use of helicopters in high altitude
construction.
1969 Completed a gas gathering system and 105 miles (170 kilometers) of 42
inch trunkline for the Iranian Gas Trunkline Project (IGAT) in Iran to
supply gas to the USSR.
1970-72
Built the Trans-Ecuadorian Pipeline, consisting of 315 miles (505
kilometers) of 20 and 26 inch pipeline, seven pump stations, four
pressure reducing stations and six storage tanks.
1974-76
Led a joint venture which built the northernmost 225 miles (365
kilometers) of the Trans-Alaskan Pipeline System.
1974-76
Led a joint venture which constructed 290 miles (465 kilometers) of
pipeline and two pump stations in the inaccessible western Amazon
basin of Peru.
1974-79
Designed and engineered the 500 mile (795 kilometer) Sarakhs-Neka gas
transmission line in northeastern Iran.
1976-79
Acted as technical leader of a consortium which designed and supplied
six modularized gas compressor stations totaling 726,000 horsepower
for the 56 inch Urengoy to Chelyabinsk gas pipeline system in western
Siberia.
1982-83
Built the Cortez carbon dioxide pipeline system in the southwestern
United States, consisting of 505 miles (815 kilometers) of 30 inch
pipe.
1984-86
Through a joint venture, constructed the All American Pipeline System,
a 1,240 mile (1,995 kilometer) 30 inch heated pipeline, including 23
pump stations, in the southwestern United States.
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1985-86
Built a 185 mile (300 kilometer) 24 inch crude oil pipeline from
Ayacucho to Covenas in Colombia.
1987 Rebuilt 25 miles (40 kilometers) of the Trans-Ecuadorian crude oil
pipeline within six months after major portions were destroyed by an
earthquake.
1988-92
Performed the project management, engineering, procurement and field
support services to expand the Great Lakes Gas Transmission System in
the northern United States. The expansion involved modifications to 13
compressor stations and the addition of 660 miles (1,060 kilometers)
of 36 inch pipeline in 50 separate loops.
1989-90
Built the Alto Magdalena Pipeline System in Colombia, consisting of
250 miles (400 kilometers) of 20 inch crude oil pipeline, one pump
station and a tank farm.
1989-92
Provided pipeline engineering and field support services for the Kern
River Gas Transmission System, a 36 inch pipeline project extending
over 685 miles (1,100 kilometers) of desert and mountains from Wyoming
to California in the United States.
1984-95
Developed and furnished a rapid deployment fuel pipeline distribution
and storage system for the U.S. Army which was used extensively and
successfully in Saudi Arabia during Operation Desert Shield/Desert
Storm in 1990/1991 and in Somalia during 1993.
1992-93
Rebuilt oil field gathering systems in Kuwait as part of the post-war
reconstruction effort.
1992-93
Built 150 miles (240 kilometers) of a 42 inch pipeline in Oregon to
expand the Pacific Gas Transmission System.
1992-94
Resumed activities in the C.I.S. Selected to develop export pipeline
system for Caspian Pipeline Consortium from Tengiz field in Kazakstan
to Black Sea oil terminal at Novorossiysk, Russia, and established a
representative office and joint stock company in Russia.
1994 Re-entered the Venezuela oil service market through the acquisition of
CAMSA.
1995 Entered into a cooperation agreement with a Japanese trading company
providing for the joint development of projects in selected markets in
Southeast Asia and established an office in Jakarta, Indonesia, to
pursue major projects in the region.
1995-96
Carrying out two contracts in Pakistan for construction, material
procurement and engineering of the MFM Pipeline Extension Project,
which consists of 225 miles (365 kilometers) of 18 inch and 16 inch
multi-product pipeline and related facilities.
LINES OF BUSINESS
The Company operates in a single industry segment, primarily providing
contract services to the oil and gas industry. The main lines of business
within this segment include construction, engineering and specialty services.
Construction Services
The Company is one of the most experienced contractors serving the oil and
gas industry. The Company's construction capabilities include the expertise to
construct and replace large diameter cross-country pipelines. The Company also
possesses the ability to construct oil and gas production facilities, pump
stations, flow stations, gas compressor stations, gas processing facilities
and other related facilities; and to construct piers, docks and bridges.
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Pipeline Construction. World demand for pipelines results from the need to
move millions of barrels of crude oil and petroleum products and billions of
cubic feet of natural gas to refiners, processors and consumers each day.
Pipeline construction is capital intensive, and the Company owns, operates and
maintains a fleet of specialized equipment necessary for it to engage in the
pipeline construction business. The Company focuses on pipeline construction
activity in remote areas and harsh climates where it believes its experience
gives it a competitive advantage. Willbros believes that it has constructed
more miles of pipeline than any other private sector company.
The construction of a cross country pipeline involves a number of sequential
operations along the designated pipeline right-of-way. These operations are
virtually the same for all overland pipelines, but personnel and equipment may
vary widely depending upon such factors as the time required for completion,
general climatic conditions, seasonal weather patterns, the number of road
crossings, the number and size of river crossings, terrain considerations,
extent of rock formations, density of heavy timber and amount of swamp.
Construction often involves separate crews to perform the following different
functions: clear the right-of-way; grade the right-of-way; excavate a trench
in which to bury the pipe; haul pipe to intermediate stockpiles from which
stringing trucks carry pipe and place individual lengths (joints) of pipe
alongside the ditch; bend pipe joints to conform to changes of direction and
elevation; clean pipe ends and line up the succeeding joint; perform various
welding operations; non-destructively inspect welds; clean pipe and apply
anti-corrosion coatings; lower pipe into the ditch; backfill the ditch; bore
and install highway and railroad crossings; drill, excavate or dredge and
install pipeline river crossings; tie in all crossings to the pipeline;
install mainline valve stations; conduct hydro/pneumatic testing; install
cathodic protection system; and perform final clean up.
Special equipment and techniques are required to construct pipelines across
wetlands. From a launching station on dry land, a section of several joints of
pipe which have been welded together may be pushed into a flooded ditch. By
securing floaters to the pipe it is possible to float the pipe. The next
section is then welded to the end of the previous section, after which it is
pushed into the flooded ditch. The same method can be used from a properly
secured and anchored barge. Another specialized swamp pipe laying technique is
to lay the pipe from a lay barge which moves along the right of way, laying
one joint at a time; each joint is aligned and welded, and the weld non-
destructively inspected and coated before being lowered in. The Company uses
swamp pipelaying methods extensively in Nigeria, where most of its
construction operations are carried out in the Niger River delta. In addition
to primary equipment such as laybarges, dredges and swamp backhoes, the
Company has a substantial investment in support vessels, including tugboats,
barges, supply boats, and houseboats, which are required in order to maintain
a capability in swamp pipeline construction.
Station Construction. Oil and gas companies require various facilities in
the course of producing, processing, storing and moving oil and gas. The
Company is experienced and capable of constructing facilities such as pump
stations, flow stations, gas processing facilities, gas compressor stations
and metering stations. The Company is capable of building such facilities
onshore, offshore or in swamp locations. The construction of station
facilities, while not nearly as capital intensive as pipeline construction, is
generally characterized by complex logistics and scheduling, particularly on
projects in locations where seasonal weather patterns limit construction
options, and in countries where the importation process is difficult.
Willbros' capabilities have been enhanced by its experience in dealing with
such challenges in numerous countries around the world.
Marine Construction. The Company constructs and installs fixed drilling and
production platforms in Venezuela, primarily in Lake Maracaibo. Because of the
extremely corrosive conditions, concrete, rather than steel, piling is driven
deep into the lakebed and supports such platforms. The Company is also capable
of building bridges, docks, jetties and mooring or breasting dolphins. The
Company's marine fleet includes pile driving barges, derrick barges and other
vessels which support marine construction operations.
Construction services contributed 56%, 29% and 31%, respectively, of the
Company's contract revenues in 1993, 1994 and 1995.
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Engineering Services
The Company provides engineering, project management and material
procurement services to the oil and gas industry and government agencies. To
complement its engineering services, the Company also provides a full range of
field services, including surveying, right-of-way acquisition, material
receiving and control, construction inspection and facilities startup
assistance. Such services are furnished to a number of oil and gas industry
and government clients on a stand-alone basis; and, in addition, are provided
as part of engineering, procurement and construction contracts undertaken by
the Company.
The Company specializes in providing engineering services to assist clients
in constructing or expanding pipeline systems, compressor stations, pump
stations, fuel storage facilities and field gathering and production
facilities. Through experience, the Company has developed expertise in
addressing the unique engineering issues involved with pipeline systems and
associated facilities to be installed where climatic conditions are extreme,
where areas of environmental sensitivity must be crossed, where fluids which
present extreme health hazards must be transported and where fluids which
present technical challenges regarding material selection are transported.
Climatic Constraints. In the design of pipelines and associated facilities
to be installed in harsh environments, special provisions for metallurgy of
materials and foundation design must be addressed. The Company is experienced
in designing pipelines in arctic conditions, where permafrost and extremely
low temperatures are prevalent, and in desert conditions, mountainous terrain
and swamp.
Environmental Impact of River Crossings. The Company has considerable
capability in designing pipeline crossings of rivers and streams in such a way
as to minimize environmental impact. The Company possesses expertise to
determine the optimal crossing techniques (e.g., open cut, directionally
drilled or overhead) and to develop site specific construction methods to
minimize bank erosion, sedimentation and other environmental impacts.
Seismic Design and Stress Analysis. Company engineers are experienced in
seismic design of pipeline crossings of active faults and areas where
liquefaction or slope instability may occur due to seismic events. They also
carry out specialized stress analyses of piping systems that are subjected to
expansion and contraction due to temperature changes, as well as loads from
equipment and other sources.
Hazardous Materials. Special care must be taken in the design of pipeline
systems transporting sour gas. Sour gas presents not only challenges regarding
personnel safety (hydrogen sulfide leaks can be extremely hazardous), but
material must be specified to withstand extremely corrosive conditions.
Hydraulics Analysis for Fluid Flow in Piping Systems. The Company employs
engineers with the specialized knowledge necessary to address properly the
effects of both steady state and transient flow conditions for a wide variety
of fluids transported by pipelines (natural gas, crude oil, refined petroleum
products, natural gas liquids, carbon dioxide and water). This expertise is
important in optimizing the capital costs of pipeline projects where pipe
material costs typically represent a significant portion of total project
capital costs.
Natural Gas Transmission Systems. The expansion of the natural gas
transportation network in the United States in recent years has been a major
contributor to the engineering business of the Company. The Company believes
it has established a strong position as a leading supplier of engineering
services to natural gas pipeline transmission companies in the United States.
Since 1988, Willbros has provided, or is providing, engineering services for
seven major natural gas pipeline projects in the United States, totaling more
than 3,300 miles (5,400 kilometers) of large diameter pipe for new systems and
expansions of existing systems. During this same period, Willbros was also the
engineering contractor for 15 compressor stations (or additions to existing
stations) for six clients.
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Liquids Pipelines and Storage Facility Design. Since the 1970's, when
Willbros engineered a number of crude oil and refined petroleum products
systems in the United States, Colombia, Nigeria, Iran and Peru, Willbros has
become recognized for its expertise in the engineering of systems for the
storage and transportation of petroleum products and crude oil. More recently,
the Company has been responsible for the engineering of a major expansion of a
products pipeline system in the United States, involving 395 miles (640
kilometers) of pipeline in New Mexico and Texas. Currently, the Company is
providing project management, engineering and field services for a major
expansion of a crude oil system in Wisconsin and Illinois, involving over 450
miles (725 kilometers) of large diameter pipeline to serve the upper midwest
refineries with Canadian crude oil.
U.S. Government Services. Since 1981, Willbros has established its position
with U.S. government agencies as a leading engineering contractor for jet fuel
storage and aircraft fueling facilities, having performed the engineering for
major projects at seven U.S. military bases including three air bases outside
the U.S. The award of these projects was based on contractor experience and
personnel qualifications.
Design of Peripheral Systems. The Company's expertise extends to the
engineering of a wide range of project peripherals, including various types of
support buildings and utility systems, power generation and electrical
transmission, communications systems, fire protection, water and sewage
treatment, water transmission, roads and railroad sidings.
Material Procurement. Because material procurement plays such a critical
part in the success of any project, the Company maintains an experienced staff
to carry out material procurement activities. Material procurement services
are provided to clients as a complement to the engineering services performed
for a project. On engineering, procurement and construction contracts
undertaken by the Company, material procurement is especially critical to the
timely completion of construction. The Company maintains a computer-based
material procurement, tracking and control system, which utilizes software
enhanced to meet the Company's specific requirements.
Engineering services contributed 16%, 23% and 15%, respectively, of the
Company's contract revenues in 1993, 1994 and 1995.
Specialty Services
The Company provides a wide range of support and ancillary services related
to the construction, operation, repair and rehabilitation of pipelines.
Frequently, such services require the utilization of special equipment which
is costly and requires operating expertise. Due to the initial equipment cost
and operating expertise required, many companies contract for the use of such
special equipment and experienced personnel. The Company owns and operates a
variety of the special equipment that is used to support construction projects
and to provide a wide range of oilfield services. The following is a
description of the primary types of specialty services.
Dredging. The Company conducts dredging operations on its own projects and
as a subcontractor for other companies. Dredging equipment is required to pump
sand to establish a land location in a swamp and to excavate trenches for
pipelines in swamps or offshore locations and for river crossings. Dredging
equipment is also used to maintain required depth of navigation channels for
barges and other water craft. This maintenance dredging is often performed on
annual or multi-year contracts. The Company owns a fleet of dredges, including
cutter suction dredges and grab dredges, which are routinely used in Nigeria
and can be readily deployed to other projects in the region.
Pipe Coating. The Company owns and operates coating equipment which applies
a variety of protective anti-corrosion coatings to the external surface of
line pipe. The external coating is required to protect buried pipe in order to
mitigate external corrosion.
Concrete Weight Coating. Pipelines installed in wetlands or marine
environments must be heavy enough to offset the buoyancy forces on the buried
pipeline to keep the pipeline from floating out of the
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ditch. The most effective method of achieving the required negative buoyancy
is concrete coating applied over the anti-corrosion coating to a calculated
thickness. The Company owns and operates a facility in Nigeria to apply
concrete weight coating to line pipe.
Pipe Double Jointing. Large diameter pipe for onshore pipeline projects is
normally manufactured in 40 foot (12 meter) nominal lengths (joints) to
facilitate ocean transportation. On long distance, large diameter pipeline
projects, it is usually economical to weld two joints into an 80 foot (24
meter) double joint at a location or locations along the pipeline route. This
technique reduces the amount of field welding by 50%, and, because welding is
often the critical operation, it may accelerate construction of the pipeline.
The double joint welds are made with a semi-automatic submerged arc welding
process which produces high quality and consistent welds at lower costs than
field welding. The Company owns two transportable self-contained double joint
plants which can handle 24 inch to 48 inch pipe and are used on both domestic
and international projects.
Piling. The Company's subsidiary in Venezuela specializes in the fabrication
and installation of 36 inch concrete piles up to 220 feet (67 meters) in
length. These piles are used to construct marine facilities such as drilling
platforms, production platforms, bridges, docks, jetties and mooring or
breasting dolphins. The Company also owns barges and pile driving equipment to
install piles in Venezuela and Nigeria.
Marine Heavy Lift Services. The primary equipment used for oil and gas
production facilities is usually manufactured on skids at the vendor's shop
and transported to the production site by ocean-going water craft. The Company
owns a variety of heavy lift barges and tugs to transport such equipment from
the receiving country port to the production location and to install the
equipment on the platforms. Other services include marine salvage and dry-dock
facilities for inland water barges.
Transport of Dry and Liquid Cargo. Exploration and production operations in
marine environments require logistical support services to transport a variety
of liquid and dry cargo to the work sites. The Company owns and operates a
diversified fleet of marine equipment to provide transportation services to
support these operations in Nigeria and Venezuela.
Rig Moves. Derricks used for drilling oil and gas wells and for well work-
overs require heavy transportation equipment to move such equipment and tanks
and storage vessels between well locations. The Company owns a fleet of heavy
trucks and trailers and provides transportation services to move rigs for
clients in Oman and Venezuela.
Pipeline Rehabilitation Services. The Company and BG Inspection Services,
Inc., the U.S. pipeline inspection unit of British Gas plc, have executed a
Joint Development Agreement to pursue pipeline repair and rehabilitation
projects in North, Central and South America. The joint effort will promote
the utilization of the British Gas developed "epoxy-filled repair sleeve" and
will offer a full range of related pipeline rehabilitation services related to
the oil and gas industry, including inspection, assessment and rehabilitation
construction services. This repair technique permits permanent repairs to be
made to a pipeline without cutting sections of pipe from the pipeline and
without interruption of service. The Company and British Gas have also used
this rehabilitation procedure for a client in Oman on approximately 790 miles
(1,275 kilometers) of 6 inch through 38 inch crude oil and natural gas
pipelines.
Maintenance and Repair Services. The Company provides a wide range of other
services including mechanical, electrical, instrumentation, civil works, road
maintenance and provision of camp services for operating personnel associated
with operation and maintenance of oil and gas gathering systems and production
equipment.
Specialty services contributed 28%, 48% and 54%, respectively, of the
Company's contract revenues in 1993, 1994 and 1995.
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GEOGRAPHIC REGIONS
The Company currently operates in the following geographic regions: Africa,
Asia, the C.I.S., the Middle East, North America and South America.
The following table reflects the Company's contract revenues by geographic
region for 1993, 1994 and 1995.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1993 1994 1995
---------------- ---------------- ----------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
-------- ------- -------- ------- -------- -------
(DOLLAR AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Africa....................... $ 87,215 41% $ 68,908 47% $ 95,972 43%
Asia......................... -- -- -- -- 29,728 13
C.I.S. ...................... 4,851 2 540 1 1,283 1
Middle East.................. 60,006 29 23,469 16 21,870 10
North America................ 57,939 28 48,061 33 52,100 24
South America................ -- -- 4,738 3 19,553 9
-------- --- -------- --- -------- ---
$210,011 100% $145,716 100% $220,506 100%
======== === ======== === ======== ===
</TABLE>
See Note 13 to the Consolidated Financial Statements included elsewhere in
this Prospectus for additional information about the Company's operations in
these geographic regions.
Africa
Willbros began serving the petroleum industry in Nigeria in 1962, when it
was selected to construct the TransNiger Pipeline System, and has maintained a
continuous operating presence in Nigeria since that time. Willbros has also
completed a number of major projects in other African countries including
Algeria, Libya, Egypt, Morocco and Gabon, the most recent being the Peace
Vector Project for the U.S. Army Corps of Engineers in Egypt, which involved
procuring materials for an air base to support F-16 aircraft and providing
onsite technical assistance to Egyptian contractors building the base. The
Company has formed an Egyptian limited liability company and has established a
business development office in Cairo to pursue work prospects in Egypt.
The Company has management staff resident in Africa, assisted by engineers,
managers and craftsmen with extensive African experience, capable of providing
construction expertise, repair and maintenance services, dredging operations,
pipe coating and engineering support. Strong local relationships have enabled
Willbros to satisfy the varied needs of its clientele in the region.
The Company's activities in Nigeria are directed from a fully staffed
operational base near Port Harcourt. This 60 acre compound includes office and
living facilities, equipment and vehicle repair shops, a marine jetty and
warehouses for both Company and client materials and spare parts. Customized
computer systems are utilized for payroll and personnel, accounting,
estimating, cost and progress control, inventory control, maintenance
management and the health, safety and environmental program. The Company has
diversified its range of services by adding dredging and pipe coating
expertise. Having diverse yet complementary capabilities has often given the
Company a competitive advantage on projects which contain several distinct
work elements within the project's scope of work. For example, the Company is
the only contractor operating in the Nigerian oil and gas sector capable, on
its own, of executing a pipeline construction project, which requires yard
coating of line pipe, installation of major water crossings and both swamp and
cross country segments of pipeline.
The Company's current backlog in Nigeria includes the construction of a 24
inch pipeline crossing of the Escravos River for NNPC, contracts with Shell to
provide dredging services and swamp flowline maintenance services, a swamp
pipeline construction contract and various pipe coating services related to
Shell, Chevron and NNPC projects.
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The Company believes that there will be significant opportunities to expand
its business in Africa, particularly through the development of natural gas
projects. There are large reserves of natural gas in West Africa, extending
from Ivory Coast to Angola, which are potentially exploitable. Depending upon
the world market for natural gas and the availability of financing, the amount
of potential new work could be substantial. The Company intends to maintain
its presence in the region and seeks to increase its share of available work.
The Company is currently monitoring major work prospects in Cameroon, Chad,
Egypt, Nigeria and Tanzania. The Company anticipates submitting bids for these
prospects.
Asia
In an effort to take advantage of the rapidly growing economies in Asia, the
Company has identified this region as a priority target market for geographic
expansion. In March 1995, the Company established an office in Jakarta,
Indonesia, to pursue potential major projects in Asia. In October 1995, the
Company entered into a cooperation agreement with a major Japanese trading
company providing for the joint development of projects in Indonesia, Malaysia
and Thailand. The Company is currently constructing, bidding, or developing
projects in Australia, China, Indonesia, Malaysia, Pakistan, the Philippines,
Thailand and Vietnam.
In January 1995, Pak-Arab Refinery, Ltd. awarded the Company two contracts,
one for the supply of project materials and the other for the engineering and
construction of the MFM Pipeline Extension Project in Pakistan. The project
scope includes 225 miles (365 kilometers) of 18 and 16 inch petroleum products
pipeline commencing at Mahmood Kot and ending at Machhike. In May 1995, the
Company was awarded an additional part of the MFM project which consists of
the expansion of an existing terminal at Mahmood Kot (including 267,000
barrels of storage capacity), addition of a new terminal and pump station at
Faisalabad (including 270,000 barrels of storage), addition of a storage
terminal at Machhike (including 443,000 barrels of storage) and design of a
future pump station at Kot Bahadur Shah. The Company has established a project
office in Lahore, Pakistan, to manage these projects.
Commonwealth of Independent States (C.I.S.)
The C.I.S. contains vast reserves of oil and gas. The oil reserves contained
in the Tengiz Field, the largest field to be served by the planned Caspian
Crude Oil Export Pipeline System (the "CPC Pipeline System"), and the gas
reserves contained in the Bovanenkovskoye Field, the anchor field on the gas-
rich Yamal peninsula, are each generally recognized to be among the largest in
the world. These are but two of many fields which are candidates for
significant exploration and production investments. Many of the Company's
clients are major oil and gas companies who are candidates to participate in
the development of energy resources in the C.I.S. The Company is prepared to
offer its support services to such clients.
Willbros' activities in this region date back to 1976, when Willbros was the
technical leader of a consortium which was awarded a major contract to design
and supply six modularized gas turbine compressor stations, housing 42
compressor units with a total capacity of 726,000 horsepower, for the Urengoy
to Chelyabinsk 56 inch gas pipeline system in western Siberia. Since the
completion of the project in 1979, contacts and relationships have been
maintained with personnel throughout the Russian oil and gas sector, including
members of various technical institutes. To compete in the Russian market, the
Company has established an Accredited Representative Office in Moscow, as well
as a Russian joint stock company.
In 1992, the Company was selected to perform the project development of the
CPC Pipeline System designed to transport oil from the Tengiz field in
Kazakstan approximately 930 miles (1,500 kilometers) to Russia's Black Sea oil
terminal at Novorossiysk. The project is principally owned by the governments
of Russia, Kazakstan and Oman. In late 1993, this development effort was
completed with the submission of a full set of turnkey contract documents to
the project sponsors, who subsequently decided to build the system in two
phases. Recently, a Willbros-led joint venture was selected for exclusive
negotiations
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regarding a turnkey contract for Phase I of the CPC Pipeline System, which
includes a new pump station near Kropotkin, Russia, approximately 155 miles
(250 kilometers) of 40 inch pipeline, a 1.5 million barrel tank farm, a tanker
loading facility on the Black Sea, and up to 2 miles (3 kilometers) of 36 inch
submarine pipeline. A Memorandum of Agreement has been executed, pursuant to
which the Company is carrying out certain engineering work. Until ownership
interests have been finalized, it is unlikely that a contract for Phase I of
the project will be awarded.
In 1995, the Company was awarded a contract by Transneft, the Russian oil
pipeline monopoly, to perform pipeline routing studies and other project
development activities related to the Baltic Crude Oil Export System. This
proposed multi-billion dollar project originated in a Conceptual Development
Plan submitted by the Company to Transneft in February 1995. Recently,
Transneft appointed the Company as its technical and financial advisor on a
project to upgrade and reverse the flow of the Russian sector of the Baku to
Tikhoretsk oil pipeline system to carry a minimum of 36.5 million barrels
annually of export crude oil from Azerbaijan.
In February 1996, the Company established a formal business alliance with
Giprotruboprovod, a design company based in Moscow which is a subsidiary of
Transneft. The two companies will cooperate to offer joint technical services
to international as well as Russian companies in respect of pipelines and
related facilities. The Company believes that this alliance will enhance its
long term prospects in the C.I.S. and that it is well positioned to increase
its presence and its level of activity in the C.I.S.
Middle East
Willbros operations in the Middle East date back to 1948. It has worked in
most of the countries in the region, with particularly heavy involvement in
Iran, Kuwait, Oman and Saudi Arabia. In Iran, Willbros designed or constructed
a substantial portion of the pipelines and related facilities that exist
today. Currently, the Company has ongoing operations in Oman, where Willbros
has been active for more than 30 years.
The Company maintains a fully staffed facility in Oman with equipment repair
facilities and spare parts on site and offers construction expertise, repair
and maintenance services, engineering support, oil field transport services,
materials procurement and a variety of related services to its clients.
Current operations in Oman include a multi-year Mechanical Services Contract
and a pipeline maintenance program for Petroleum Development Oman ("PDO").
Work carried out in Oman during 1995 included ongoing pipeline maintenance,
mechanical services and flowline work for Occidental of Oman and PDO. A recent
major project completed in Oman involved engineering, procurement and
construction services on a turnkey contract for a gas injection facility in
Occidental of Oman's Safah Field. The project included facilities for gas
dehydration, gas compression, injection gas metering, electrical power
generation and associated support utilities and buildings.
During 1992 and 1993, following the Gulf War, the Company carried out a
significant program of gathering line replacement in Kuwait to help Kuwait Oil
Company restore its production capacity. Willbros has since established a
local company and has a base of operations, including an inventory of
equipment, from which it can offer additional services.
The Company is aggressively pursuing business opportunities throughout the
Middle East and is currently bidding work or monitoring prospects in Abu
Dhabi, Kuwait, Oman, Qatar, Saudi Arabia and Yemen.
North America
Willbros has provided services to the U.S. oil and gas industry for more
than 80 years. The Company is recognized as an industry leader in the United
States, for providing state-of-the-art engineering and construction services.
The Company maintains a staff of experienced management, construction,
engineering and support personnel in the United States.
34
<PAGE>
Among Willbros' significant achievements in the United States are (a) the
construction of the two northernmost segments of the Trans-Alaskan Pipeline
System (1974-76), which consisted of a 225 mile (365 kilometer) crude oil
pipeline and a 140 mile (225 kilometer) fuel gas pipeline, (b) a joint venture
to build the All American Pipeline System (1984-86), a 1,240 mile (1,995
kilometer) heated crude oil pipeline with 23 pumping and heating stations, and
(c) Willbros involvement in nine of the ten largest gas pipeline projects
undertaken in the United States since 1988. The Company was a construction
contractor on the Pacific Gas & Electric-PGT pipeline expansion project in
Oregon and the Tuscarora Gas Transmission project in Nevada and California.
Willbros provided engineering services for the Great Lakes Gas Transmission
Company's system expansion, the Kern River Gas Transmission System, the
Northwest Pipeline System expansion, the NorAm Line AC pipeline project and
the Florida Gas pipeline project. During the same period, Willbros was the
engineering contractor for 15 compressor stations or station expansions, on
behalf of six different clients in the United States. Currently, the Company
is providing engineering services for the Northern Border pipeline extension
and the Portland Natural Gas Transmission Project in New England.
On a recent notable project, the Company was selected to provide engineering
services for the largest grass roots crude oil storage facility built in the
United States in the last decade. The facility, built in Cushing, Oklahoma,
for Plains Resources, Inc., consists of tankage with 2.0 million barrels of
storage capacity and all related facilities.
Willbros has also provided significant engineering services to the U.S.
Government during the past 15 years, particularly in fuel storage and
distribution systems and aircraft fueling facilities. Willbros performed the
engineering for major projects on seven U.S. military bases, four of which
were located within the United States. In 1984, Willbros was selected by the
U.S. Army to act as the systems integration contractor for the Southwest Asia
Petroleum Distribution Operational Project. Willbros was responsible for
developing and procuring a tactical fuel distribution and storage system to
support military operations worldwide. The system was successfully deployed in
Saudi Arabia during Operation Desert Storm. Willbros acted as the systems
integrator for this project until 1996.
The Company believes that the United States will continue to be an important
market for all of its lines of business. Environmental concerns will likely
continue to require careful, thorough and specialized professional engineering
and planning for all new facilities within the oil and gas sector.
Furthermore, the demand for replacement and rehabilitation of pipelines is
expected to increase as pipeline systems in the United States approach the end
of their design lives and population trends influence overall energy needs.
South America
Willbros' first entry into South America was in Venezuela in 1939. Since
then, Willbros has performed numerous major projects in Venezuela and other
South American countries, where its accomplishments include the construction
of five major pipeline crossings of the Andes Mountains and setting a world
altitude record for constructing a pipeline. Willbros' largest project in
South America was a $134.0 million turnkey project for the procurement and
construction of the Alto Magdalena Crude Oil Pipeline System in Colombia,
awarded to Willbros in 1989 and completed in 1990.
Venezuela, the largest oil producer in South America with production of
approximately 2.5 million barrels of oil per day, remains an important market
for the Company. In May 1994, the Company completed the acquisition (from an
affiliate of Heerema) of CAMSA, a Venezuelan company whose offices, equipment
yard and dock facilities are located in the City of Maracaibo on a 15 acre
waterfront site on Lake Maracaibo. Approximately 50% of Venezuelan crude oil
is produced from beneath Lake Maracaibo. Although the Venezuelan company's
primary expertise is in marine construction and the fabrication and
installation of 36 inch diameter cylindrical concrete piles up to 220 feet (67
meters) long and platforms for offshore projects, the Company has added
onshore equipment to complement the existing marine fleet, enabling CAMSA to
compete for both onshore and offshore construction projects, as well as
specialty
35
<PAGE>
services contracts. This acquisition provides the Company with the ability to
furnish marine support services to the oil and gas industry in the Lake
Maracaibo area, along the Venezuelan coast, and throughout the Caribbean
basin. See "Certain Transactions."
The Company maintains a fully staffed facility in Maracaibo, with resident
management personnel assigned who are responsible for estimating and tendering
bids, providing construction expertise, repair and maintenance services,
marine related services, engineering support and other needed services. Major
clients include international oil companies such as Shell, Occidental
Petroleum, and operating subsidiaries of Petroleos de Venezuela S.A.,
including Maraven, Corpoven and Lagoven.
In addition to Venezuela, the Company is aggressively pursuing business
opportunities throughout South America and is currently bidding work or
monitoring prospects in Brazil, Argentina, Bolivia, Peru, Ecuador and Chile.
Recent developments involving political changes and privatization efforts in
many of the South American countries make this region one of high interest in
the immediate future.
BACKLOG
The Company's backlog (anticipated revenue from the uncompleted portions of
existing contracts) was $104.5 million at March 31, 1996. The Company's
backlog was $139.4 million, $97.5 million and $76.1 million at December 31,
1995, 1994 and 1993, respectively. The Company includes a contract in its
backlog at such time as the contract is awarded or a firm letter of commitment
is obtained. The Company believes the backlog figures are firm, subject only
to the cancellation and modification provisions contained in various
contracts. Historically, a substantial amount of the Company's revenues in a
given year have not been reflected in its backlog at the beginning of that
year; such revenues may result from contracts of long or short duration
entered into during a year as well as from various contractual processes,
including change orders, extra work, variations in the scope of work and the
effect of escalation or currency fluctuation formulas. These revenue sources
are not added to backlog until realization of revenue is assured.
36
<PAGE>
The following is a breakdown of the Company's backlog by geographic region
as of March 31, 1995 and 1996:
<TABLE>
<CAPTION>
MARCH 31, 1995 MARCH 31, 1996
---------------- ----------------
AMOUNT PERCENT AMOUNT PERCENT
-------- ------- -------- -------
(DOLLAR AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C>
Africa........................................ $ 6,206 4.5% $ 30,184 28.9%
Asia.......................................... 67,892 48.7 33,672 32.2
C.I.S......................................... 1,144 0.8 883 0.8
Middle East................................... 43,277 31.0 19,573 18.7
North America................................. 12,095 8.7 18,572 17.8
South America................................. 8,793 6.3 1,640 1.6
-------- ----- -------- -----
Total....................................... $139,407 100.0% $104,524 100.0%
======== ===== ======== =====
</TABLE>
The $34.9 million decrease in backlog to $104.5 million at March 31, 1996,
from $139.4 million at March 31, 1995, is due mainly to work completed on
engineering, procurement and construction contracts for the MFM Pipeline
Extension Project in Pakistan, work completed and modifications of a
speciality services contract in Oman, partially offset by the addition of a
contract for the construction of a 24 inch pipeline crossing of the Escravos
River for NNPC.
A substantial percentage of the Company's revenues in past years resulted
from contracts entered into during that year or the immediately preceding
year. The following table sets forth revenues for the years indicated as a
percentage of backlog at the beginning of each such year (dollar amounts in
thousands):
<TABLE>
<CAPTION>
REVENUES FOR
BACKLOG AT YEAR ENDED
JANUARY 1 DECEMBER 31 PERCENT
---------- ------------ -------
<S> <C> <C> <C>
1991....................................... $129,220 $168,875 131%
1992....................................... 146,734 180,947 123
1993....................................... 160,565 210,011 131
1994....................................... 76,066 145,716 191
1995....................................... 97,493 220,506 226
Average 1991-95............................ $122,016 $185,211 152%
</TABLE>
No assurance can be given that future experience will be similar to historical
results in this respect.
COMPETITION
The Company's primary competitors on construction projects in developing
countries include Entrepose (France), Mannesmann (Germany), CCC (Lebanon),
Nippon Kokan (Japan), Saipem (Italy), Spie-Capag (France), Techint
(Argentina), and Bechtel (U.S.). The Company believes that it is one of the
few companies among its competitors possessing the ability to carry out large
projects in developing countries on a turnkey basis (engineering, procurement
and construction), without subcontracting major elements of the work. As a
result, the Company may be more cost effective than its competitors in certain
instances.
The Company has different competitors in different markets. In Nigeria, the
Company competes for pipe coating work with Bredero Price (Netherlands), while
its dredging competitors include Bos Kalis Westminster (Netherlands), Dredging
International (Belgium), Bilfinger & Berger (Germany), Nigerian Dredging &
Marine (Netherlands), Phillip Holzmann (Germany) and HBG (Netherlands). In
Oman, competitors in oil field transport services include Desert Lines, Al
Ahram, Hamdam and TruckOman, all Omani companies; and in construction and the
installation of flowlines and mechanical services, the Company competes with
Taylor Woodrow Towell (Britain), CCC, Dodsal (India), Saipem, Desert Lines,
37
<PAGE>
and Galfar (Oman). In Venezuela, competitors in marine support services
include Raymond de Venezuela, Petrolago, Flag Instalaciones and Siemogas, all
Venezuelan companies. In Pakistan, major competitors include Saipem and Tekfen
(Turkey).
In the United States, the Company's primary construction competitors on a
national basis include Associated, Gregory & Cook, Henkels & McCoy, Murphy
Brothers, H. C. Price, Sheehan, and Welded. In addition, there are a number of
regional competitors. Primary competitors for engineering services include
Bechtel, Brown and Root, Gulf Interstate, Marmac, Fluor Daniel Williams
Brothers, Mustang Engineering, Stone & Webster, Paragon Engineering, Trigon
Engineering and Universal Ensco.
CONTRACT PROVISIONS AND SUBCONTRACTING
Most of the Company's revenues are derived from construction, engineering
and specialty services contracts. The Company enters into four basic types of
construction contracts: firm fixed-price or lump-sum fixed-price contracts
providing for a single price for the total amount of work or for a number of
fixed lump sums for the various work elements comprising the total price;
unit-price contracts which specify a price for each unit of work performed;
time and materials contracts under which personnel and equipment are provided
under an agreed schedule of daily rates with other direct costs being
reimbursable; or a combination of the above (for example, lump sums for
certain items and unit rates for others).
The Company enters into three types of engineering contracts: firm fixed-
price or lump-sum fixed-price contracts; time and materials contracts pursuant
to which engineering services are provided under an agreed schedule of hourly
rates for different categories of personnel, and materials and other direct
costs are reimbursable; and cost-plus-fee contracts, common with U.S.
government clients under which income is earned solely from the fee received.
Cost-plus-fee contracts are often used for material procurement services.
Specialty services contracts generally are unit-price contracts which
specify a price payable per unit of work performed (e.g., per cubic meter, per
lineal meter, etc.). Such contracts usually include hourly rates for various
categories of personnel and equipment to be applied in cases where no unit
price exists for a particular work element. Under a services contract, the
client is typically responsible for supplying all materials; a cost-plus-
percentage-fee provision is generally included in the contract to enable the
client to direct the contractor to furnish certain materials.
The Company usually obtains contracts through competitive bidding or through
negotiations with long-standing clients. The Company is typically invited to
bid on projects undertaken by its clients who maintain approved bidder lists.
Bidders are pre-qualified by virtue of their prior performance for such
clients, as well as their experience, reputation for quality, safety record,
financial strength and bonding capacity.
In evaluating bid opportunities, the Company considers such factors as the
client, the geographic location and the difficulty of the work, the Company's
current and projected workload, the likelihood of additional work, the
project's cost and profitability estimates, and the Company's competitive
advantage relative to other likely bidders. The Company uses a computer-based
estimating system. The bid estimate forms the basis of a project budget
against which performance is tracked through a project cost system, enabling
management to monitor projects effectively. Project costs are accumulated
weekly and monitored against billings and payments to facilitate cash flow
management on the project.
All U.S. government contracts and many of the Company's other contracts
provide for termination of the contract for the convenience of the client. In
addition, many contracts are subject to certain completion schedule
requirements with liquidated damages in the event schedules are not met as the
result of circumstances within the control of Willbros. The Company has not
been materially adversely affected by these provisions in the past.
38
<PAGE>
The Company acts as prime contractor on a majority of the construction
projects it undertakes. In its capacity as prime contractor and when acting as
a subcontractor, the Company performs most of the work on its projects with
its own resources and typically subcontracts only such specialized activities
as hazardous waste removal, non-destructive inspection, tank erection,
catering and security. In the construction industry, the prime contractor is
normally responsible for the performance of the entire contract, including
subcontract work. Thus, when acting as a prime contractor, the Company is
subject to the risk associated with the failure of one or more subcontractors
to perform as anticipated. The Company has not incurred any significant loss
or liability on work performed by subcontractors to date.
EMPLOYEES
The Company believes its employees are its most valuable asset and that
their loyalty, productivity, pioneering spirit, work ethic and strong
commitment in providing quality services have been crucial elements in the
successes Willbros has achieved on numerous projects in remote, logistically
challenging locations around the world.
At March 31, 1996, the Company employed a multi-national work force of
approximately 3,520 persons, over 80% of whom are citizens of the respective
countries in which they work. Although the level of activity may vary from
year to year, Willbros has maintained an average work force of approximately
2,490 over the past five years. The minimum employment during that period has
been 1,840 and the maximum 4,030. At March 31, 1996, approximately 1,530 of
the Company's employees were covered by collective bargaining agreements. The
Company believes its relations with its employees are good.
The following table sets forth an approximate breakdown of the Company's
employees as of March 31, 1996.
<TABLE>
<CAPTION>
NUMBER
OF EMPLOYEES PERCENT
------------ -------
<S> <C> <C>
Nigeria................................................. 1,120 32%
Oman.................................................... 820 23
Pakistan................................................ 620 18
Venezuela............................................... 520 15
U.S. Construction....................................... 10 -
U.S. Engineering........................................ 330 9
U.S. Administration..................................... 80 2
Other Countries......................................... 20 1
----- ---
3,520 100%
===== ===
</TABLE>
EQUIPMENT
The Company owns and maintains a fleet of generally standardized
construction, transportation and support equipment and spare parts. In 1994
and 1995, expenditures for capital equipment and spare parts were $7.2 million
and $18.9 million, respectively. In addition, during 1994, the Company
acquired $4.6 million of equipment in connection with the acquisition of CAMSA
in Venezuela. At March 31, 1996, the Company's net book value of property,
plant, equipment and spare parts was $47.7 million. An estimated breakdown of
the Company's major capital equipment at December 31, 1995, is as follows:
heavy construction equipment, 690 units; transportation equipment, 890 units;
and support equipment, 3,300 units.
The Company believes the ownership of equipment is preferable to leasing to
ensure the equipment is available as needed. In addition, such ownership has
historically resulted in lower equipment costs. The Company attempts to obtain
projects that will keep its equipment fully utilized in order to increase
39
<PAGE>
profitability. All equipment is subject to scheduled maintenance to maximize
fleet readiness. The Company has maintenance facilities at Port Harcourt,
Nigeria; Azaiba, Oman; Maracaibo, Venezuela; and Broken Arrow, Oklahoma; as
well as temporary site facilities on major jobs to minimize downtime.
FACILITIES
The Company owns a 14 acre equipment yard/maintenance facility and an
adjoining 39 acre undeveloped industrial site at Broken Arrow, Oklahoma, a
short distance from Tulsa, Oklahoma. The Company also owns a 4.1 acre
commercial building site in Tulsa, which is currently for sale. In Venezuela,
the Company's offices and construction facilities are located on 15 acres of
land, which it owns, on the shores of Lake Maracaibo. The Company leases all
other facilities used in its operations, including corporate offices in
Panama; administrative and engineering offices in Tulsa, Oklahoma, and
Houston, Texas; and various office facilities, equipment sites and expatriate
housing units in England, Nigeria, Oman, Pakistan, Russia, Egypt, Kuwait,
Saudi Arabia and Indonesia. The aggregate lease payments made by the Company
for its facilities were $1.9 million in both 1994 and 1995.
INSURANCE AND BONDING
The Company maintains workers' compensation, employers' liability, general
liability, directors' and officers' liability, automobile liability, aircraft
liability, marine liability and excess liability insurance to provide benefits
to employees and to protect the Company against claims by third parties. Such
insurance is underwritten by A+ or better rated insurance companies (AM Best
rating as to claims paying ability) and, when possible, in loss-sensitive
plans with return premiums for favorable loss experience. The Company also
maintains physical damage insurance covering loss of or damage to Company
property on a worldwide basis, with special insurance covering loss or damage
caused by political or terrorist risks in locations where such coverage is
deemed prudent. Formal risk management and safety programs are maintained,
which have resulted in favorable loss ratios and cost savings. The Company
believes its risk management, safety and insurance programs are adequate to
meet its needs.
The Company is often required to provide surety bonds guaranteeing its
performance and/or financial obligations. The amounts of bonding available
depend upon experience and reputation in the industry, financial condition,
backlog and management expertise, among other factors. The Company maintains
relationships with two top-rated surety companies to provide surety limits.
LEGAL PROCEEDINGS
The Company is a party to a number of legal proceedings. The Company
believes that the nature and number of these proceedings are typical for a
firm of its size engaged in the Company's type of business and that none of
these proceedings is material to the Company's financial position.
GOVERNMENT REGULATIONS
General
Many aspects of the Company's operations are subject to government
regulations in the countries in which the Company operates, including those
relating to currency conversion and repatriation, taxation of its earnings and
earnings of its personnel, its use of local employees and suppliers. In
addition, the Company depends on the demand for its services from the oil and
gas industry and, therefore, is affected by changing taxes, price controls and
laws and regulations relating to the oil and gas industry generally. The
ability of the Organization of Petroleum Exporting Countries to meet and
maintain production targets also influences the demand for the Company's
services. The adoption of laws and regulations by countries in which the
Company operates, curtailing exploration and development drilling for oil and
gas for economic and other policy reasons, could adversely affect the
Company's operations by limiting demand
40
<PAGE>
for its services. The Company's operations are also subject to the risk of
changes in foreign and domestic laws and policies which may impose
restrictions on the Company, including trade restrictions, which could have a
material adverse effect on the Company's operations. Other types of government
regulation which could, if enacted or implemented, adversely affect the
Company's operations include expropriation or nationalization decrees,
confiscatory tax rates, primary or secondary boycotts directed at specific
countries or companies, embargoes, extensive import restrictions or other
trade barriers, mandatory sourcing rules and unrealistically high labor rate
and fuel price regulation. The Company cannot determine to what extent future
operations and earnings of the Company may be affected by new legislation, new
regulations or changes in, or new interpretations of, existing regulations.
Environmental
The Company's operations are subject to numerous environmental protection
laws and regulations which are complex and stringent. The Company regularly
works in and around sensitive environmental areas such as rivers, lakes and
wetlands. Significant fines and penalties may be imposed for non-compliance
with environmental laws and regulations, and certain environmental laws
provide for joint and several strict liability for remediation of releases of
hazardous substances, rendering a person liable for environmental damage,
without regard to negligence or fault on the part of such person. In addition
to potential liabilities that may be incurred in satisfying these
requirements, the Company may be subject to claims alleging personal injury or
property damage as a result of alleged exposure to hazardous substances. Such
laws and regulations may expose the Company to liability arising out of the
conduct of operations or conditions caused by others, or for the acts of the
Company which were in compliance with all applicable laws at the time such
acts were performed. The Company is not aware of any non-compliance with any
environmental law that could have a material adverse effect on the Company's
business or operations.
41
<PAGE>
MANAGEMENT
DIRECTORS, EXECUTIVE OFFICERS AND KEY PERSONNEL
The following table sets forth certain information regarding the directors,
executive officers and key personnel of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Larry J. Bump.................. 56 Director, Chairman of the Board of
Directors, President, Chief Executive
Officer and Chief Operating Officer
Melvin F. Spreitzer(1)......... 57 Director, Executive Vice President, Chief
Financial Officer and Treasurer
Gary L. Bracken................ 58 Vice President; President and Chief
Executive Officer of Willbros Engineering
& Construction Limited
M. Kieth Phillips.............. 53 Vice President; President, Chief Executive
Officer and Chief Operating Officer of
Willbros International, Inc.
James R. Beasley............... 53 President, Chief Executive Officer and
Chief Operating Officer of Willbros
Engineers, Inc.
John N. Hove................... 48 General Counsel and Secretary
David L. Kavanaugh............. 48 Senior Vice President of Willbros
International, Inc.
Steve W. Shores................ 46 Senior Vice President of Willbros
Engineers, Inc.
Joel M. Gall................... 47 Vice President of Willbros International,
Inc.
Arthur J. West................. 52 Vice President of Willbros International,
Inc.
Adrian P. Wright............... 51 Vice President of Willbros International,
Inc.
Jack W. Jones.................. 59 Vice President of Willbros Engineers, Inc.
Robert L. Walker............... 64 Vice President and Chief Operating Officer
of Willbros Energy Services Company
Harold A. Weller............... 59 Vice President of Willbros Engineering &
Construction Limited
Carlos A. Atik................. 33 General Manager of Willbros Construction &
Engineering--Egypt, L.L.C.
Monica M. Bagguley............. 55 Director of Willbros (Overseas) Limited
Gordon D.M. Bishop............. 44 General Manager of Willbros Middle East,
Inc.--Pakistan Branch
Jack F. Furrh, Jr.............. 56 General Manager of The Oman Construction
Company, LLC
G. Patrick Riga................ 41 General Manager of Constructora CAMSA, C.A.
James K. Tillery............... 38 Managing Director of Willbros (Nigeria)
Limited
Guy E. Waldvogel(1)(2)(3)...... 59 Director
Bryan H. Lawrence(2)(3)........ 53 Director
Peter A. Leidel(1)(2)(3)....... 40 Director
</TABLE>
- --------
(1) Member of Compensation Committee.
(2) Member of Audit Committee.
(3) Member of Stock Plan Committee.
42
<PAGE>
LARRY J. BUMP joined Willbros in 1977 as President and Chief Operating
Officer and was elected to the Board of Directors. He was named Chief
Executive Officer in 1980 and elected Chairman of the Board of Directors in
1981. He served as Chairman of the Board of Directors and Chief Executive
Officer of Heerema Holding Company, Inc. ("HHC"), a major marine engineering,
fabrication and installation contractor, the parent corporation of Heerema, in
Geneva, Switzerland, from 1985 to 1988 while he continued his duties with
Willbros. Mr. Bump continues to serve as a Director of HHC and Heerema. He has
over 32 years international experience in pipeline construction and
contracting industries, all of which were in management positions.
MELVIN F. SPREITZER joined Willbros in 1974 as Controller and was elected
Vice President of Finance in 1978. He was elected Executive Vice President,
Chief Financial Officer and Treasurer in 1987, and a Director in 1992. He was
also Secretary from 1987 to 1996. He has over 20 years of corporate finance
experience and is responsible for all phases of financial management of the
Company.
GARY L. BRACKEN joined Willbros in 1960 as an engineer and has served the
Company for over 33 years, excluding a brief period from 1972 through 1974
when he was employed by another major U.S. pipeline contractor. He rejoined
Willbros in 1975 and was promoted to Vice President in 1978. He was elected
Executive Vice President of Willbros Energy Services Company ("WESCO") in 1982
and served as its President from 1988 to 1990. In 1990, Mr. Bracken was
elected Chairman of the Board of Directors and Chief Executive Officer of
Willbros Engineers, Inc. ("WEI") and served in those capacities through 1992.
In late 1992, he was elected President and Chief Executive Officer of Willbros
Engineering & Construction Limited ("WECL").
M. KIETH PHILLIPS joined Willbros in 1978 as Vice President. He was elected
Vice President of Willbros International, Inc. ("WII") in 1979 and was
promoted to Senior Vice President of WII in 1980, Executive Vice President of
WII in 1983, President and Chief Operating Officer of WII in 1988 and Chief
Executive Officer of WII in 1990. Most of his more than 28 years experience in
the pipeline construction industry has been international and in management
positions.
JAMES R. BEASLEY joined Willbros in 1981 when WEI was acquired. He was
elected Vice President of WEI in 1981, Senior Vice President and General
Manager of WEI in 1982, President and Chief Operating Officer of WEI in 1986
and Chief Executive Officer of WEI in 1993. Mr. Beasley has more than 25 years
of experience in pipeline engineering and operations.
JOHN N. HOVE became General Counsel of Willbros in 1991. He was elected
Secretary of Willbros in 1996. He has more than 24 years experience as a
lawyer and has provided legal assistance to Willbros since 1973. Prior to
1991, he was a shareholder in a law firm in Tulsa, Oklahoma, where he
concentrated his practice on international business transactions.
DAVID L. KAVANAUGH joined Willbros in 1977 as an engineer assigned to Saudi
Arabia. From 1979 until 1988, he served as Project Engineer and Project
Manager in Nigeria. From 1988 to 1991, he managed construction projects in
Gabon and Colombia. In 1991, he was elected Vice President of WII, and in 1995
he was promoted to Senior Vice President of operations and business
development for WII. Mr. Kavanaugh has over 25 years of pipeline construction
experience.
STEVE W. SHORES joined Willbros in 1981 when WEI was acquired. He was
elected Vice President of WEI in 1986 and Senior Vice President of WEI in
1991. Mr. Shores has over 20 years of pipeline engineering experience.
JOEL M. GALL joined Willbros in 1978 as an Office Manager in the Middle
East. He was transferred to Nigeria in 1979 where he served as Administrative
Manager, General Manager and Managing Director until 1991 when he was elected
Vice President of WII. Since 1994, he has been responsible for business
development activities in Southeast Asia. Mr. Gall has over 25 years of
experience in the international pipeline construction industry.
43
<PAGE>
ARTHUR J. WEST joined Willbros in 1962 in North Africa. In 1988, he became
Vice President of Willbros Middle East, Inc. ("WMEI") and, in 1992, he was
elected Vice President of WII and became responsible for business development
and operations for WMEI in the Middle East. Mr. West has over 30 years
experience in pipeline construction in the areas of administrative and project
management.
ADRIAN P. WRIGHT joined Willbros in 1973 as an engineer assigned to Algeria.
From 1974 until 1982, he served as Project Engineer and Project Manager in
Nigeria. From 1982 to 1992, he served as Project Manager in Oman, Colombia and
the United States. In 1992, Mr. Wright was elected Vice President of WII, and
he is currently responsible for WII's estimating and technical services.
JACK W. JONES joined Willbros in 1983. He was elected Vice President of WEI
in 1991 and was assigned as General Manager of Willbros' Houston office in
1994. Mr. Jones has over 35 years of pipeline engineering experience.
ROBERT L. WALKER joined Willbros in 1981 as Vice President of U.S.
construction operations for WESCO. Prior to joining Willbros, Mr. Walker was in
project management on the Trans-Alaskan Pipeline System and was Operations Vice
President for a major U.S. contractor. In 1990, he was appointed Chief
Operating Officer of WESCO. Mr. Walker has nearly 35 years experience in
pipeline construction in the areas of estimating, planning, administration and
management.
HAROLD A. WELLER joined Willbros in 1975. From 1976 to 1979, he was Project
Director on a project to design and supply gas compressor stations for a gas
pipeline system in western Siberia. In 1979, he left Willbros to join a major
gas compressor manufacturer until 1984. Following that he operated a private
consulting business until 1991. In 1991, he returned to Willbros as Director of
Business Development for Willbros (Overseas) Limited ("WOL"). In 1994, he was
elected Vice President of WECL. Mr. Weller has over 35 years experience in the
engineering and management of petrochemical, oil refinery and pipeline projects
in the oil and gas industry.
CARLOS A. ATIK joined Willbros in 1991 as an assistant Project Manager in
Egypt. He assumed the duties of Project Manager in 1992 and continued in that
role until 1995 when he was named General Manager of Willbros Construction &
Engineering--Egypt, L.L.C. Mr. Atik has over 11 years of engineering and
construction experience in Africa and the Middle East.
MONICA M. BAGGULEY joined WOL in 1974. Since 1985, she has served as Director
of Personnel and Purchasing for WOL. Ms. Bagguley has over 20 years experience
in international personnel management and project procurement.
GORDON D.M. BISHOP joined Willbros in 1976 as Senior Surveyor. He has 19
years experience in pipeline construction at various levels of engineering and
project management capacities in Iran, Nigeria and Oman. He is currently
Project Manager of a major turnkey pipeline construction project in Pakistan.
JACK F. FURRH, Jr. joined Willbros in 1981 as Administrative Manager. He left
Willbros in 1986 to operate his own business. In 1990, he rejoined the Company
as Project Manager and in 1991 he was promoted to General Manager of The Oman
Construction Company, LLC. He has over 25 years experience in the energy-
related industry in contracts, safety and administrative management.
G. PATRICK RIGA joined Willbros in 1981 in Oman as a warehouseman. From 1985
to 1988, he served in administrative capacities in Colombia and Ecuador. From
1989 until 1994, he was employed by HDI, a horizontal drilling company. He
rejoined the Company in 1994 as Assistant General Manager in Venezuela and, in
1995, was promoted to General Manager of Constructora CAMSA, C.A. Mr. Riga has
over 17 years experience in the pipeline industry, including operations,
quality control and administrative management.
44
<PAGE>
JAMES K. TILLERY joined Willbros in 1983 as a field engineer. He has over 15
years experience as an Engineer and Project Manager working in both U.S. and
international pipeline construction. In 1995, he was named Managing Director
of Willbros (Nigeria) Limited.
GUY E. WALDVOGEL has been a Director of Willbros since 1990. He has been the
Management Consultant of Business and Corporate Strategy of Heerema and HHC
since 1990 and also currently serves as Chief Financial Officer and as a
director of Heerema. He was formerly Senior Executive Vice President of
Societe Generale De Surveillance, a leading international cargo inspection
firm. Mr. Waldvogel also serves as a director of Renaissance Group, Inc., Bank
Julius Baer (a Swiss public company) and PetitJean S.A. (a French public
company).
BRYAN H. LAWRENCE has been a Director of the Company since 1992. He has been
employed by Dillon Read since 1966 and is currently a Managing Director. Mr.
Lawrence also serves as a Director of D & K Wholesale Drug, Inc., Hallador
Petroleum Company, TransMontaigne Oil Company, Vintage Petroleum, Inc., Benson
Petroleum Ltd. (a Canadian public company) and certain non-public companies in
the energy industry in which affiliates of Dillon Read hold equity interests.
PETER A. LEIDEL has been a Director of the Company since 1992. He has been
employed continously by Dillon Read since 1983 and is currently a Senior Vice
President of Dillon Read.
Messrs. Bump, Spreitzer, Waldvogel, Lawrence and Leidel currently serve as
directors of the Company pursuant to a Stockholders Agreement among certain
stockholders of the Company owning a majority of the outstanding shares of
Common Stock and Preferred Stock of the Company. This Stockholders Agreement
will automatically terminate upon the effectiveness of the Registration
Statement of which this Prospectus is a part. It is expected that all of these
individuals will continue as directors of the Company following the Offering.
In May 1996, the Articles of Incorporation of the Company were amended and
restated to provide for a classified Board of Directors consisting of three
approximately equal classes. The terms of office of those directors in the
first class (Messrs. Spreitzer and Leidel) expire in 1997, of those in the
second class (Mr. Lawrence) in 1998, and of those in the third class (Messrs.
Bump and Waldvogel) in 1999. The directors of the class elected at each annual
meeting of stockholders hold office for a term of three years. Following
consummation of the Offering, the Company intends to appoint one or more
additional non-employee directors to the Board of Directors. Officers are
elected annually by, and serve at the discretion of, the Board of Directors.
COMPENSATION OF DIRECTORS
Members of the Board of Directors, including employee directors, do not
currently receive compensation for their services as directors other than
reimbursement for expenses incurred in attending meetings. Following the
closing of the Offering, the Company intends to pay its non-employee directors
an annual retainer of $18,000 plus a fee of $1,000 per meeting for attending
meetings of the Board of Directors and any committee thereof. Non-employee
directors will automatically receive non-qualified stock options under the
Willbros Group, Inc. Director Stock Plan (the "Director Plan") upon or
following the effectiveness of the Registration Statement of which this
Prospectus is a part. Under the Director Plan, an initial option to purchase
up to 5,000 shares of Common Stock will be granted to each existing non-
employee director on the date of the effectiveness of the Registration
Statement of which this Prospectus is a part and to each new non-employee
director on the date such director is elected or appointed to the Board of
Directors. Each non-employee director will also receive annually an option to
purchase 1,000 shares of Common Stock on the annual anniversary of the date on
which such director received an initial option and on each succeeding annual
anniversary of such date during the period of such director's incumbency. Upon
effectiveness of the Registration Statement of which this Prospectus is a
part, Messrs. Waldvogel, Lawrence and Leidel will each receive an option to
purchase 5,000 shares of Common Stock plus an option
45
<PAGE>
to purchase 1,000 shares of Common Stock for each year of prior service as a
director of the Company. The option exercise price of each option granted
under the Director Plan is equal to the fair market value of the Common Stock
on the date of grant. A total of 125,000 shares of Common Stock is available
for issuance under the Director Plan.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has a standing Compensation Committee, Audit
Committee, Stock Plan Committee and several other committees.
The Compensation Committee is composed of Messrs. Leidel, Waldvogel and
Spreitzer. The Compensation Committee reviews and takes final action for and
on behalf of the Board of Directors with respect to compensation, bonus,
incentive and benefit provisions for the officers of the Company and its
subsidiaries. The Compensation Committee meets at such times as may be deemed
necessary by the Board of Directors or the Compensation Committee. There were
two meetings of the Compensation Committee during 1995.
The recently established Audit Committee is composed of Messrs. Waldvogel,
Lawrence and Leidel, all of whom are non-employee directors of the Company.
The Audit Committee, which has not convened to date, will recommend to the
full Board of Directors the firm to be appointed each year as independent
auditors of the Company's financial statements and to perform services related
to the completion of such audit. The Audit Committee also has the
responsibility to (a) review the scope and results of the audit with the
independent auditors, (b) review with management and the independent auditors
the Company's interim and year-end financial condition and results of
operations, (c) consider the adequacy of the internal accounting, bookkeeping
and other control procedures of the Company, and (d) review any non-audit
services and special engagements to be performed by the independent auditors
and consider the effect of such performance on the auditors' independence. The
Audit Committee will also review at least once each year, the terms of all
material transactions and arrangements, if any, between the Company and its
directors, officers and affiliates.
The recently established Stock Plan Committee, which has not convened to
date, is composed of Messrs. Waldvogel, Lawrence and Leidel, and administers
the Company's 1996 Stock Plan. See "--1996 Stock Plan."
Certain members of the Board of Directors and others also constitute a
Retirement Plans Committee and a Medical Plan Committee, which oversee the
administration of such plans.
LIMITATIONS ON THE LIABILITY OF DIRECTORS AND INDEMNIFICATION MATTERS
Article 64 of the General Corporation Law of Panama (the "PGCL") provides
that directors shall be liable to creditors of the Company for authorizing a
dividend or distribution of assets with knowledge that such payments impair
the Company's capital or for making a false report or statement in any
material respect. In addition, Article 444 of the Panama Code of Commerce
("Article 444") provides that directors are not personally liable for the
Company's obligations, except for liability to the Company and third parties
for the effectiveness of the payments to the Company made by stockholders, the
existence of dividends declared, the good management of accounting, and in
general, for execution or deficient performance of their mandate or the
violation of laws, the Articles of Incorporation, the By-laws or resolutions
of the stockholders. Article 444 provides that the liability of directors may
only be claimed pursuant to a resolution of the stockholders.
The PGCL does not address the issue as to whether or not a corporation may
eliminate or limit a director's, officer's or agent's liability to the
corporation. Nevertheless, Arias, Fabrega & Fabrega, Panamanian counsel to the
Company, has advised the Company that, as between the Company and its
46
<PAGE>
directors, officers and agents, such liability may be released under general
contract principles, to the extent that a director, officer or agent, in the
performance of his duties to the corporation, has not acted with gross
negligence or malfeasance. This release may be included in the Articles of
Incorporation or By-laws of the Company or in a contract entered into between
the Company and the director, officer or agent. While such a release may not
be binding with respect to a third person or stockholder claiming liability
under Article 444, in order to claim such liability, a resolution of the
stockholders would be necessary, which the Company believes would be difficult
to secure in the case of a publicly held company.
The PGCL does not address the extent to which a corporation may indemnify a
director, officer or agent. However, the Company's Panamanian counsel has
advised the Company that, under general agency principles, an agent, which
would include directors and officers, may be indemnified against liability to
third persons, except for a claim based on Article 64 of the PGCL or for
losses due to gross negligence or malfeasance in the performance of such
agent's duties. The Company's Restated Articles of Incorporation release
directors from personal liability to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director and authorize the
Company's Board of Directors to adopt By-laws or resolutions to this effect or
to cause the Company to enter into contracts providing for limitation of
liability and for indemnification of directors, officers and agents.
The Company's Restated By-laws provide for indemnification of directors and
officers of the Company to the fullest extent permitted by, and in the manner
permissible under, the laws of the Republic of Panama. The Company has also
entered into indemnification agreements with each of its directors and
officers to provide for the indemnification of, and the advancement of
expenses to, the Company's directors and officers to the fullest extent
(whether partial or complete) permitted by the laws of the Republic of Panama.
The Company also carries directors' and officers' liability insurance to
defray costs of a suit or proceeding against an officer or director.
47
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information with respect to the
compensation of the Company's Chief Executive Officer and each of the
Company's four other most highly compensated executive officers, based on
salary and bonus earned during fiscal 1995, for services in all capacities to
the Company and its subsidiaries during fiscal 1995.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------- --------------------- ---------
SECURITIES
RESTRICTED UNDERLYING LONG-TERM
OTHER ANNUAL STOCK OPTIONS/ INCENTIVE ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARD(S) SARS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($)(1) ($)(2) ($) (#)(3) ($) ($)(4)
------------------ ---- ------- ------- ------------ ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Larry J. Bump........... 1995 328,000 539,223 38,100 -0- 30,000 -0- 6,000
Chairman, President and
Chief Executive Officer
Gary L. Bracken......... 1995 197,000 323,855 11,430 -0- 9,000 -0- 9,500
President of Willbros
Engineering &
Construction Limited
M. Kieth Phillips....... 1995 197,000 323,924 11,430 -0- 9,000 -0- 9,500
President of Willbros
International, Inc.
Melvin F. Spreitzer..... 1995 175,500 288,456 11,430 -0- 9,000 -0- 9,500
Executive Vice
President and Chief
Financial Officer
James R. Beasley........ 1995 129,000 86,094 5,715 -0- 4,500 -0- 9,500
President of Willbros
Engineers, Inc.
</TABLE>
- --------
(1) Consists primarily of compensation paid under management incentive
compensation plans.
(2) Consists of the realizable value (on the date of exercise) of shares of
Common Stock purchased upon exercise of non-qualified stock options due to
exercise price being below fair market value on the date of grant. Does
not include the value of perquisites and other personal benefits because
the aggregate amount of such compensation, if any, does not exceed the
lesser of $50,000 or 10% of the total amount of annual salary and bonus
for any named individual.
(3) Consists solely of options to acquire shares of Common Stock.
(4) Consists of Company contributions to the Company's (a) Investment Plan in
the amount of $6,000 each for Messrs. Bump, Bracken, Phillips, Spreitzer
and Beasley, and (b) Executive Life Plan in the amount of $3,500 each for
Messrs. Bracken, Phillips, Spreitzer and Beasley.
48
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information with respect to options
granted to the named executive officers of the Company during fiscal 1995. The
Company has never granted any stock appreciation rights.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- -------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/ POTENTIAL REALIZABLE VALUE
UNDERLYING SARS MARKET AT ASSUMED ANNUAL RATES
OPTIONS/ GRANTED TO PRICE OF STOCK PRICE APPRECIATION
SARS EMPLOYEES EXERCISE OR ON DATE FOR OPTION TERM(3)
GRANTED IN FISCAL BASE PRICE OF GRANT EXPIRATION -----------------------------
NAME (#)(1) YEAR ($/SH) ($/SH)(2) DATE 0%($) 5%($) 10%($)
---- ---------- ---------- ----------- --------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Larry J. Bump........... 30,000 15.4 3.83 5.10 11-8-95 38,100 38,100 38,100
Gary L. Bracken......... 9,000 4.6 3.83 5.10 11-8-95 11,430 11,430 11,430
M. Kieth Phillips....... 9,000 4.6 3.83 5.10 11-8-95 11,430 11,430 11,430
Melvin F. Spreitzer..... 9,000 4.6 3.83 5.10 11-8-95 11,430 11,430 11,430
James R. Beasley........ 4,500 2.3 3.83 5.10 11-8-95 5,715 5,715 5,715
</TABLE>
- --------
(1) Consists solely of options to acquire shares of Common Stock. The options
were granted for a term of eight days, subject to earlier termination in
certain events related to termination of employment, and were exercisable
in full on the date of grant. The option exercise price may be paid in
cash or in cash and a promissory note.
(2) The market price of shares of Common Stock has been determined in the past
by the Company's Board of Directors considering all relevant factors,
including the Company's book value, in accordance with the Company's stock
ownership plans.
(3) Potential realizable value illustrates the value that might be realized
upon exercise of the options immediately prior to the expiration of their
term. The 0% column represents the realizable value on the date of the
grant due to the exercise price being below the market price on the grant
date. The values in the 5% and 10% columns do not significantly appreciate
due to the limited term of the options (which was eight days from the date
of grant).
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
The following table sets forth certain information with respect to options
exercised by the named executive officers of the Company during fiscal 1995,
and the number and value of unexercised options held by such executive
officers at the end of the fiscal year. The Company has never granted any
stock appreciation rights.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES NUMBER OF SECURITIES IN-THE-MONEY
ACQUIRED UNDERLYING UNEXERCISED OPTIONS/SARS AT FY-END
ON VALUE OPTIONS/SARS AT FY-END(#) ($)(1)
EXERCISE REALIZED ------------------------- -------------------------
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Larry J. Bump........... 30,000 38,100 -0- -0- -0- -0-
Gary L. Bracken......... 9,000 11,430 -0- -0- -0- -0-
M. Kieth Phillips....... 9,000 11,430 -0- -0- -0- -0-
Melvin F. Spreitzer..... 9,000 11,430 -0- -0- -0- -0-
James R. Beasley........ 4,500 5,715 -0- -0- -0- -0-
</TABLE>
- --------
(1) Market value of the underlying securities at exercise date or fiscal year-
end, as the case may be, minus the option exercise price.
49
<PAGE>
PENSION PLAN TABLE
The following table sets forth estimated annual lifetime retirement benefits
payable to eligible employees (including the persons named in the Summary
Compensation Table) under the Company's qualified retirement and non-qualified
benefit restoration plans in the specified compensation and years of service
classifications following retirement at age 65.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL LIFETIME RETIREMENT BENEFITS FOR
AVERAGE YEARS OF SERVICE INDICATED
ANNUAL -------------------------------------------------
EARNINGS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
-------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$125,000.................. $ 33,923 $ 45,165 $ 56,505 $ 67,748 $ 79,088
150,000.................. 41,248 54,915 68,705 82,373 96,163
175,000.................. 48,573 64,665 80,905 96,998 113,238
200,000.................. 55,898 74,415 93,105 111,623 130,313
300,000.................. 85,198 113,415 141,905 170,123 198,613
400,000.................. 114,498 152,415 190,705 228,623 266,913
600,000.................. 173,098 230,415 288,305 345,623 403,513
</TABLE>
The years of credited service for the persons named in the Summary
Compensation Table as of December 31, 1995, are: Larry J. Bump, 18 years; Gary
L. Bracken, 20 years; M. Kieth Phillips, 17 years; Melvin F. Spreitzer, 21
years; and James R. Beasley, 14 years. Amounts shown in the Pension Plan Table
are straight life annuities for years of service classifications listed. The
Pension Plan is an "excess" plan and is not offset by receipt of Social
Security benefits or any other amounts.
The Company maintains multiple contributory retirement plans for all
eligible employees (excluding nonresident aliens, union members, and certain
temporary and contract employees). Participants who retire at age 65 are
entitled to receive retirement benefits determined on the basis of a formula
reflecting years of credited service multiplied by a percentage of the final
average salary. The final average salary is derived from base salary and
annual bonus received in the highest-paid five consecutive years during the
participant's total years of service with Willbros.
Benefits are nonforfeitable when a participant completes five years of
vesting service. Benefits may commence when a participant reaches the later of
Normal Retirement Date (age 65) or the five-year anniversary of the
participation date. Reduced benefits may commence upon a participant's
attaining age 55 and five years of participation. Multiple joint and survivor
benefit options are available to married participants.
Contributions are made by the Company based on the actuarially determined
cost of accrued retirement benefits, subject to statutory limits. Employee
contributions are 2% of compensation up to the limit imposed under Section
401(a)(17) of the Internal Revenue Code of 1986, as amended (the "Code").
Employee contributions and interest may be distributed upon the participant's
request at termination or retirement, resulting in a reduced annuity for
vested participants.
In addition to the qualified retirement plans, the Company maintains an
Executive Benefit Restoration Plan ("EBRP") to partially restore retirement
benefits to its top five officers. Benefit reductions resulting from statutory
limits will be partially replaced in the form of a lump sum benefit, according
to the plan, which limits the amount of compensation to be used in calculating
the restoration benefit to 150% of the participant's base salary. The Company
makes an annual, actuarially calculated contribution to an irrevocable trust
for future distributions from the EBRP. The EBRP is administered by the
Company's Retirement Plans Committee appointed by the Company's Board of
Directors.
50
<PAGE>
1996 STOCK PLAN.
General. Effective May 21, 1996, the Company established the Willbros Group,
Inc. 1996 Stock Plan (the "1996 Plan"), the purpose of which is to strengthen
the ability of the Company to attract and retain well-qualified executive and
managerial personnel and to encourage stock ownership by such personnel in
order to increase their proprietary interest in the Company's success. The
1996 Plan provides for awards to key employees of the Company, including
officers and directors who are also employees of the Company. The total amount
of Common Stock currently authorized and reserved for issuance under the 1996
Plan is 1,125,000 shares. No awards have been granted under the 1996 Plan.
The 1996 Plan provides that during any calendar year, no participant may be
granted awards with respect to more than 150,000 shares, subject to certain
adjustments. The stock issuable under the 1996 Plan may be authorized and
unissued shares or treasury shares. If any shares subject to any award are
forfeited or payment is made in a form other than shares or the award
otherwise terminates without payment being made, the shares subject to such
awards will again be available for issuance under the 1996 Plan. In addition,
the number of shares deemed to be issued under the 1996 Plan upon exercise of
a stock option will be reduced by the number of shares surrendered in payment
of the exercise or purchase price of such stock option.
The 1996 Plan is administered by the Stock Plan Committee of the Board of
Directors (the "Committee"). The members of the Committee are not eligible for
awards under the 1996 Plan. The Committee is authorized to determine plan
participants, the types and amounts of awards to be granted and the terms,
conditions and provisions of awards, prescribe forms of award agreements,
interpret the 1996 Plan, establish, amend and rescind rules and regulations
relating to the 1996 Plan and make all other determinations which may be
necessary or advisable for the administration of the 1996 Plan. The Committee
has not made a determination as to the number of employees currently eligible
for consideration as participants in the 1996 Plan.
Summary of Awards. The 1996 Plan permits the granting of any or all of the
following types of awards: (a) stock options, (b) stock appreciation rights
("SARs"), and (c) restricted stock. Generally, awards under the 1996 Plan are
granted for no consideration other than prior and future services. Awards
granted under the 1996 Plan may, in the discretion of the Committee, be
granted alone or in addition to, in tandem with or in substitution for any
other award under the 1996 Plan or other plan of the Company. Such grants
could include grants of options after a decline in the market price of the
Common Stock in substitution for previously granted options having a higher
exercise price.
Stock options granted pursuant to the 1996 Plan may, at the discretion of
the Committee, be either incentive stock options ("ISOs"), within the meaning
of Section 422 of the Code, or non-qualified stock options. The exercise price
of an ISO may not be less than the fair market value of the Common Stock on
the date of grant (or 110 percent of such fair market value in the case of
ISOs granted to employees who possess more than 10 percent of the combined
voting power of all classes of stock of the Company). In the case of non-
qualified stock options, the exercise price shall be as determined by the
Committee in its sole discretion, except that it shall not be less than 85
percent of the fair market value of the Common Stock on the date of grant.
Options granted pursuant to the 1996 Plan are exercisable in whole or in part
at such time or times as may be determined by the Committee, except that ISOs
may not be exercised after the expiration of 10 years from the date granted.
Generally, options may be exercised by the payment of cash, promissory notes,
stock or a combination thereof.
Any SARs granted under the 1996 Plan will give the holder the right to
receive cash or stock in an amount equal to the difference between the fair
market value of a share of Common Stock on the date of exercise and the grant
price. The grant price of an SAR is determined by the Committee but may not be
less than the fair market value of a share of Common Stock on the date of
grant. Methods of exercise and settlement and other terms of SARs are
determined by the Committee.
51
<PAGE>
The Committee may award restricted stock, generally consisting of shares
which may not be disposed of by participants until certain restrictions
established by the Committee lapse. Such restrictions may lapse in whole or in
installments as the Committee determines. A participant receiving restricted
stock will have all of the rights of a stockholder of the Company, including
the right to vote the shares and the right to receive any dividends, unless
the Committee otherwise determines. Upon termination of employment during the
restriction period, restricted stock will be forfeited, subject to such
exceptions, if any, as are authorized by the Committee.
Awards are not transferable other than by will or the laws of descent and
distribution. In the event of any change affecting the shares of Common Stock
by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares, or other corporate
change or any distributions to Common Stock holders, the Committee may make
such substitution or adjustment in the aggregate number or kind of shares
which may be distributed under the 1996 Plan and in the number, kind and
exercise, grant or purchase price of shares subject to the outstanding awards
granted under the 1996 Plan, or make provisions for a cash payment relating to
any award, as it deems to be appropriate in order to maintain the purpose of
the original grant.
Amendment to and Termination of the 1996 Plan. The Board of Directors may
amend, alter, suspend, discontinue or terminate the 1996 Plan without the
consent of stockholders or participants, except that stockholder approval of
such action will be sought if such approval is required by any federal or
state law or regulation, or if the Board of Directors in its discretion
determines that obtaining such stockholder approval is advisable. Unless
earlier terminated by the Board of Directors, the 1996 Plan will terminate
when no shares remain reserved and available for issuance, and the Company has
no further obligation with respect to any award granted under the 1996 Plan.
Change of Control. In the event of a Change of Control of the Company, as
defined in the 1996 Plan, all outstanding awards under the 1996 Plan,
regardless of any limitations or restrictions, become fully exercisable and
freed of all restrictions.
EMPLOYMENT AGREEMENTS
Effective January 1, 1996, the Company entered into Employment Agreements
with Messrs. Bump, Spreitzer, Phillips and Bracken, which remain in effect
until December 31, 1998. Each such employee receives an annual base salary
equal to his total annual base salary then in effect, which may be increased,
but not decreased, upon direction from the Board of Directors of that
employee's employer. Each agreement provides for salary adjustments for cost
of living increases; the payment of bonuses at the discretion of such Board of
Directors; and the eligibility to participate during calendar years 1996
through 1998 in the Willbros USA, Inc. Management Incentive Plan, dated
January 1, 1996. Each agreement contains a confidentiality provision which
would be in effect for two years after termination of the employee's
employment, as well as a non-competition provision with which the employee's
employer has the right to require compliance for two years from the date of
termination of employment or retirement. Each agreement also contains change
of control provisions whereby if the employee's employment is terminated for
any reason within 12 months of the occurrence of a change of control of the
Company or if following a change of control of the Company the employee's
employment is not continued upon expiration of the current employment
agreement term, such employee will be entitled to elect to receive a severance
payment equal to the sum of (a) three times his base salary then in effect,
(b) three times the average incentive payment earned for the three years
preceding the termination of employment, (c) an early retirement discount
reduction, and (d) a tax recovery payment.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1995, Melvin F. Spreitzer, an executive officer of the Company, was a
member of the Compensation Committee and participated in deliberations
concerning executive officer compensation. The other two members of the
Compensation Committee, Guy E. Waldvogel and Peter A. Leidel, are non-employee
directors of the Company.
On September 30, 1993, certain subordinated notes of the Company, in an
aggregate principal amount of $10 million, were prepaid in full, and certain
warrants which had been issued in connection with such
52
<PAGE>
subordinated notes, representing the right to acquire 12,000 shares of the
Company's Preferred Stock in the aggregate, were exercised. Such notes and
warrants were issued by the Company in 1992 for an aggregate consideration of
$10 million cash in order to finance, in part, the purchase of the Company
from Heerema and were held by the Yorktown and Concord Investors, which
consist of affiliates of Dillon Read, Heerema and certain members of the
Company's management, including Mr. Spreitzer. Prior to the effectiveness of
the Registration Statement of which this Prospectus is a part, such shares of
Preferred Stock will be converted into 360,000 shares of Common Stock. Mr.
Waldvogel is a director of Heerema, and Mr. Leidel is a Senior Vice President
of Dillon Read.
On May 25, 1994, a subsidiary of the Company completed the acquisition of
CAMSA, a Venezuelan company, from an affiliate of Heerema for a purchase price
of $7.3 million in cash. Funding for this acquisition was provided by cash
reserves of the Company and no borrowings were utilized. CAMSA is the parent
company of Inversiones CAMSA, C.A., which in turn has three operating
subsidiaries: Constructora CAMSA C.A.; "ESCA" Equipment Service Compania
Anonima; and Pretensado S.A. The Company also received a $2.5 million
indemnity from the seller against certain defined items including unrecorded
liabilities. Heerema guaranteed the seller's performance under the indemnity.
During 1995, pursuant to provisions of the seller's indemnity, the Company
received $1.5 million, in consideration for which it released the seller and
Heerema from any further liability under the indemnity. The amount received
($1.5 million) was recorded as a reduction of costs. Mr. Waldvogel is a
director of Heerema.
Since January 1, 1993, Mr. Spreitzer, an executive officer of the Company,
has been indebted to the Company in amounts in excess of $60,000. The largest
amount of such indebtedness outstanding during such period was $143,730. This
indebtedness bears no interest and the outstanding balance of such
indebtedness as of May 31, 1996, was $143,730. This indebtedness was incurred
in connection with the exercise of options to purchase Common Stock and
Preferred Stock of the Company.
CERTAIN TRANSACTIONS
On May 25, 1994, a subsidiary of the Company completed the acquisition of
CAMSA, a Venezuelan company from an affiliate of Heerema. Mr. Bump is a
director of Heerema and HHC, and Mr. Waldvogel is a director of Heerema. See
"Management--Compensation Committee Interlocks and Insider Participation."
Since January 1, 1993, certain executive officers of the Company have been
indebted to the Company in amounts in excess of $60,000 under various notes.
Such notes were issued to evidence certain loans by the Company to such
officers in connection with the purchase of shares of Common Stock and
Preferred Stock pursuant to certain management and employee stock ownership
plans. No shares will be sold in the future under these plans.The following
table sets forth, as to the persons shown, the largest amounts of their
indebtedness outstanding during such period, the interest rates, the final
maturity dates and the outstanding balances of such indebtedness as of May 31,
1996:
<TABLE>
<CAPTION>
LARGEST FINAL OUTSTANDING
AMOUNT OF INTEREST MATURITY BALANCE AT
NAME INDEBTEDNESS RATE DATE MAY 31, 1996
---- ------------ -------- -------------- ------------
<S> <C> <C> <C> <C>
Larry J. Bump................ $493,181 0% April 15, 2000 $493,181
Gary L. Bracken.............. 143,730 0 April 15, 2000 143,730
M. Kieth Phillips............ 143,730 0 April 15, 2000 143,730
Melvin F. Spreitzer.......... 143,730 0 April 15, 2000 143,730
James R. Beasley............. 93,645 0 April 15, 2000 71,160
</TABLE>
On September 30, 1993, certain subordinated notes of the Company, in an
aggregate principal amount of $10 million, were prepaid in full, and certain
warrants which had been issued in connection with such subordinated notes,
representing the right to acquire 12,000 shares of the Company's Preferred
Stock in the aggregate, were exercised. See "Management--Compensation
Committee Interlocks and Insider Participation."
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<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of the date of this Prospectus, and
as adjusted to reflect the sale by the Selling Stockholders of the shares of
Common Stock offered hereby, by (a) each person who is known by the Company to
own beneficially more than five percent of the outstanding shares of Common
Stock, (b) each director of the Company, (c) each of the executive officers of
the Company named in the Summary Compensation Table, (d) all executive
officers and directors of the Company as a group, and (e) each Selling
Stockholder. Except as otherwise indicated, the Company believes that the
beneficial owners of the Common Stock listed below, based on information
furnished by such owners, have sole investment and voting power with respect
to such shares.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED PRIOR TO SHARES BENEFICIALLY
OFFERING(1) NUMBER OWNED AFTER OFFERING(1)
--------------------------- OF SHARES --------------------------------
BENEFICIAL OWNERS NUMBER PERCENT OFFERED NUMBER PERCENT(2)
----------------- ------------ ---------- --------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Heerema Holding Construction,
Inc. (3).................... 4,964,520 35.8% 4,964,520 -- -- %
Yorktown Energy Partners,
L.P.; Concord Partners II,
L.P.; et al (4)............. 4,223,040(5) 30.5 1,035,480(6) 3,187,560(7) 23.0
Larry J. Bump (8)(9)......... 1,006,590(10) 7.3 -- 1,006,590(10) 7.3
Melvin F. Spreitzer.......... 257,100(11) 1.9 -- 257,100(11) 1.9
Bryan H. Lawrence (12)....... -- -- -- -- --
Guy E. Waldvogel (9)......... -- -- -- -- --
Peter A. Leidel (13)......... -- -- -- -- --
M. Kieth Phillips............ 255,300(14) 1.8 -- 255,300(14) 1.8
Gary L. Bracken.............. 257,100(15) 1.9 -- 257,100(15) 1.9
James R. Beasley............. 67,500 * -- 67,500 *
All executive officers and
directors as a group
(9 people)
(9)(10)(11)(12)(13)(14)(15).. 1,843,590 13.3 -- 1,843,590 13.3
</TABLE>
- -------
*Less than 1%.
(1) Assumes conversion of all outstanding shares of Preferred Stock into
Common Stock prior to the effectiveness of the Registration Statement of
which this Prospectus is a part.
(2) Assumes no exercise of the Underwriters' over-allotment option.
(3) Heerema's address is 5 rue Pedro-Meylan, 1208 Geneva, Switzerland.
Heerema is a wholly owned subsidiary of Heerema Holding Company, Inc., a
Panama corporation ("HHC").
(4) The stockholders' address is 535 Madison Avenue, New York, New York
10022.
(5) Consists of (a) 3,324,120 shares held by Yorktown Energy Partners, L.P.
("Yorktown"), a private equity fund managed by Dillon Read; (b) 651,600
shares held by Concord Partners II, L.P. ("Concord II"), a private
venture capital fund managed by Dillon Read; (c) 96,240 shares held by
Concord Partners Japan Limited ("Concord Japan"), a private venture
capital fund managed by Dillon Read; (d) 146,130 shares held by Dillon
Read as agent for certain related persons; and (e) 4,950 shares held by
Lexington Partners IV, L.P. ("Lexington"), a private investment fund for
certain Dillon Read affiliated persons and managed by Dillon Read. These
investors are referred to in this Prospectus as the "Yorktown and Concord
Investors."
(6) Consists of 845,310 shares being offered by Yorktown, 165,700 shares
being offered by Concord II and 24,470 shares being offered by Concord
Japan.
(7) Consists of (a) 2,478,810 shares held by Yorktown, (b) 485,900 shares
held by Concord II, (c) 71,770 shares held by Concord Japan, (d) 146,130
shares held by Dillon Read as agent for certain affiliated persons, and
(e) 4,950 shares held by Lexington.
(8) The stockholder's address is 2431 East 61st Street, Suite 700, Tulsa,
Oklahoma 74136-1267.
(9) Mr. Bump is a director of Heerema and HHC, and Mr. Waldvogel is a
director of Heerema. They disclaim beneficial ownership of the shares of
Common Stock held by Heerema.
(10) Includes 420,000 shares held in a family limited partnership in which Mr.
Bump is the sole general partner.
(11) Includes 40,000 shares held in a family limited partnership in which Mr.
Spreitzer is the sole general partner.
(12) Dillon Read, which manages Yorktown, holds for Mr. Lawrence 18,618 shares
of Common Stock. Mr. Lawrence does not have voting or investment power
with respect to such shares. Mr. Lawrence is a Managing Director of
Dillon Read.
(13) Mr. Leidel is a Senior Vice President of Dillon Read which is responsible
for managing Yorktown, Concord II and Concord Japan, which hold 4,071,960
shares of Common Stock in the aggregate. He is also a partner in Concord
II. Mr. Leidel disclaims beneficial ownership of the shares of Common
Stock owned by such funds.
(14) Includes 132,360 shares held in a family limited partnership in which Mr.
Phillips is the sole general partner.
(15) Includes 32,100 shares held in a family limited partnership in which Mr.
Bracken is the sole general partner.
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<PAGE>
DESCRIPTION OF CAPITAL STOCK
Under the Company's Restated Articles of Incorporation (the "Company's
Charter"), the Company is currently authorized to issue (a) 35,000,000 shares
of Common Stock, par value $.05 per share; (b) 362,000 shares of Preferred
Stock, par value $100.00 per share; and (c) 1,000,000 shares of Class A
Preferred Stock, par value $.01 per share.
COMMON STOCK
As of the date of this Prospectus, there were 13,860,000 shares of Common
Stock outstanding, held by 164 holders of record, after giving effect to the
conversion into Common Stock of the outstanding Preferred Stock. All of such
outstanding shares of Common Stock are fully paid and nonassessable. Each
share of Common Stock has an equal and ratable right to receive dividends
when, as and if declared by the Board of Directors of the Company out of
assets legally available therefor and subject to the dividend obligations of
the Company to the holders of any Preferred Stock or Class A Preferred Stock
then outstanding. The Company's present credit agreement prohibits the payment
of dividends on Common Stock. See "Dividend Policy."
In the event of a liquidation, dissolution or winding up of the Company, the
holders of Common Stock are entitled to share equally and ratably in the
assets available for distribution after payment of all liabilities, subject to
any prior rights of any holders of Preferred Stock or Class A Preferred Stock
that at the time may be outstanding.
The holders of Common Stock have no preemptive, subscription, conversion or
redemption rights, and are not subject to further calls or assessments of the
Company. There are no sinking fund provisions applicable to the Common Stock.
Each share of Common Stock is entitled to one vote in the election of
directors and on all other matters submitted to a vote of stockholders, and
there are no limitations on the voting rights of nonresident stockholders of
the Company. Holders of Common Stock have no right to cumulate their votes in
the election of directors. There are no governmental laws or regulations in
the Republic of Panama affecting the remittance of dividends, interest and
other payments to nonresident stockholders of the Company so long as the
Company continues not to engage in business in the Republic of Panama.
The Company's Charter contains certain restrictions, subject to the
determination by the Company's Board of Directors in good faith and in its
sole discretion, on the transfer of any shares of Common Stock to prevent the
Company from becoming a "controlled foreign corporation" under U.S. tax law.
See "--Possible Anti-takeover Provisions."
PREFERRED STOCK
Prior to the Offering, there were outstanding 362,000 shares of Preferred
Stock. Prior to the effectiveness of the Registration Statement of which this
Prospectus is a part, the outstanding shares of Preferred Stock will be
converted into 10,860,000 shares of Common Stock. The shares of Preferred
Stock, upon conversion, will become authorized but unissued shares of
Preferred Stock and will have the terms currently specified in the Company's
Charter. Due to the terms of such Preferred Stock, as set forth in the
Company's Charter, the Company does not intend to issue any shares of
Preferred Stock in the future.
CLASS A PREFERRED STOCK
Prior to the Offering, there were no outstanding shares of Class A Preferred
Stock. Class A Preferred Stock may be issued from time to time in one or more
series, and the Board of Directors, without further approval of the
stockholders, is authorized to fix the dividend rates and terms, conversion
rights, voting rights, redemption rights and terms, liquidation preferences,
sinking fund and any other rights, preferences, privileges and restrictions
applicable to each series of Class A Preferred Stock. The purpose of
authorizing the Board of Directors to determine such rights, preferences,
privileges and restrictions is to eliminate delays associated with a
stockholder vote on specific issuances. The issuance of Class A Preferred
Stock,
55
<PAGE>
while providing flexibility in connection with possible acquisitions and other
corporate purposes, could in certain instances decrease the amount of earnings
and assets available for distribution to holders of Common Stock and adversely
affect the rights and powers, including voting rights, of such holders, and
may have the effect of delaying, deferring or preventing a change in control
of the Company. For example, the Board of Directors, with its broad power to
establish the rights and preferences of authorized but unissued Class A
Preferred Stock, could issue one or more series of Class A Preferred Stock
entitling holders to vote separately as a class on any proposed merger or
consolidation, to convert Class A Preferred Stock into a larger number of
shares of Common Stock or other securities, to demand redemption at a
specified price under prescribed circumstances related to a change in control,
or to exercise other rights designed to impede a takeover.
POSSIBLE ANTI-TAKEOVER PROVISIONS
The Company's Charter and Restated By-laws contain certain provisions that
might be characterized as anti-takeover provisions. Such provisions may render
more difficult certain possible proposals to acquire control of the Company
and make removal of management of the Company more difficult.
The Company's Charter provides for the Board of Directors to be divided into
three classes of directors serving staggered three-year terms, with the number
of directors in the three classes to be as nearly equal as possible. Any
director of the Company may be removed from office but only for cause and only
by the affirmative vote of a majority of the then outstanding shares of stock
entitled to vote on the matter. Any stockholder wishing to submit a nomination
to the Board of Directors must follow certain procedures outlined in the
Company's Charter. Any proposal to amend or repeal the provisions of the
Company's Charter relating to the matters contained above in this paragraph
requires the affirmative vote of the holders of 75 percent or more of the
outstanding shares of stock entitled to vote on the matter. Under the
Company's Restated By-laws, stockholder action taken without a meeting may be
taken only by unanimous written consent of the stockholders.
As described above, the Company's Charter authorizes a class of undesignated
Class A Preferred Stock consisting of 1,000,000 shares. Class A Preferred
Stock may be issued from time to time in one or more series, and the Board of
Directors, without further approval of the stockholders, is authorized to fix
the rights, preferences, privileges and restrictions applicable to each series
of Class A Preferred Stock. The purpose of authorizing the Board of Directors
to determine such rights, preferences, privileges and restrictions is to
eliminate delays associated with a stockholder vote on specific issuances. The
issuance of Class A Preferred Stock, while providing flexibility in connection
with possible acquisitions and other corporate purposes, could, among other
things, adversely affect the voting power of the holders of Common Stock and,
under certain circumstances, make it more difficult for a third party to gain
control of the Company.
The Company's Charter provides for certain restrictions on the transfer of
any shares of Common Stock to prevent the Company from becoming a "controlled
foreign corporation" under U.S. tax law. Any purported transfer, including
without limitation a sale, gift, assignment, devise or other disposition of
Common Stock, which would result in a person or persons becoming the
beneficial owner of 10% or more of the issued and outstanding shares of Common
Stock, is subject to a determination by the Company's Board of Directors in
good faith, in its sole discretion, that such transfer would not in any way,
directly or indirectly, affect the Company's status as a non-controlled
foreign corporation. The transferee or transferor to be involved in such
proposed transfer must give written notice to the Secretary of the Company not
less than 30 days prior to such proposed transfer. In the event of an
attempted transfer in violation of the provisions of the Company's Charter
relating to the matters contained in this paragraph, the purported transferee
will acquire no rights whatsoever in such shares of Common Stock. Nothing in
such charter provision, however, precludes the settlement of any transactions
entered into through the facilities of the New York Stock Exchange. If the
Board of Directors determines that a transfer has taken place in violation of
these restrictions, the Board of Directors may take such action as it deems
advisable to refuse to give effect to or to prevent such transfer, including
without limitation, instituting judicial proceedings to enjoin such transfer.
56
<PAGE>
REGISTRATION RIGHTS
Pursuant to a Registration Rights Agreement dated April 9, 1992 (the
"Registration Rights Agreement"), certain holders of Common Stock and
Preferred Stock convertible into Common Stock are entitled to certain rights
with respect to the registration of certain of their shares of Common Stock
under the Securities Act. Parties to the Registration Rights Agreement include
Heerema, the Yorktown and Concord Investors and certain officers, directors
and other stockholders of the Company. A total of 12,054,240 shares of Common
Stock are covered by the Registration Rights Agreement, including the
6,000,000 shares being sold in the Offering.
The Registration Rights Agreement provides that (a) after March 31, 1996,
the holders of 10% or more of the shares of registrable securities under the
Registration Rights Agreement have the right to request the Company to
register under the Securities Act shares of Common Stock held by them in an
initial public offering; (b) following such initial public offering such
holders have the right to request the Company to make up to four additional
registrations under the Securities Act of Common Stock held by such parties;
and (c) if the Company proposes to register any Common Stock under the
Securities Act pursuant to a form which may be utilized for the registration
of Common Stock held by parties to the Registration Rights Agreement, such
parties have the right to request the Company to include in such registration
the Common Stock held by such parties. Apart from the shares of Common Stock
being sold by the Selling Stockholders in the Offering, parties to the
Registration Rights Agreement have waived all rights to require the Company to
register their shares of Common Stock concurrently with the registration of
shares in the Offering. Such parties have also waived all rights to demand the
registration of Common Stock until 180 days after the date of this Prospectus.
Under most circumstances, the Company has agreed to pay substantially all
expenses incident to its performance of or compliance with the Registration
Rights Agreement in connection with certain registration statements effected
pursuant to the Registration Rights Agreement. The underwriters have the
right, subject to certain limitations, to limit the number of shares included
in such registrations. The Company has agreed to indemnify the holders of
Common Stock to be registered pursuant to the Registration Rights Agreement.
LISTING
The Common Stock has been approved for listing on the New York Stock
Exchange under the symbol "WG."
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock is ChaseMellon
Shareholder Services, L.L.C.
SHARES ELIGIBLE FOR FUTURE SALE
Prior to the Offering, there has been no public market for the Common Stock.
Future sales of substantial amounts of Common Stock could adversely affect
market prices prevailing from time to time. Sales of substantial amounts of
Common Stock in the public market after the lapse of existing resale
restrictions could adversely affect the prevailing market price and the
ability of the Company to raise equity capital in the future.
Upon completion of the Offering, the Company will have 13,860,000 shares of
Common Stock outstanding. Of these shares, the 6,000,000 shares sold in the
Offering will be freely tradeable without restriction or further registration
under the Securities Act except for any shares purchased by an "affiliate" (as
that term is defined under the Securities Act) of the Company, which will be
subject to the resale limitations of Rule 144 promulgated under the Securities
Act ("Rule 144").
57
<PAGE>
The remaining shares held by officers, directors, employees, consultants and
other stockholders of the Company are either "restricted securities," within
the meaning of Rule 144, or shares which were issued under Regulation S under
the Securities Act. In either case such shares may be publicly sold only if
registered under the Securities Act or sold in accordance with an applicable
exemption from registration, such as Rule 144 or Section 4(1) of the
Securities Act. These shares are also subject to agreements prohibiting resale
before a certain date. See "Underwriting." Beginning 180 days after the date
of this Prospectus, upon the expiration of agreements not to sell such shares,
7,860,000 shares will become eligible for sale, subject, in some cases, to
compliance with Rule 144 and/or Rule 701.
In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned restricted securities
for at least two years, or who is an "affiliate" (as defined in Rule 144), is
entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of: (a) one percent of the then outstanding shares of
the Common Stock (138,600 shares immediately after the Offering), or (b) an
amount equal to the average weekly reported volume of trading in such shares
during the four calendar weeks preceding such sale. Sales under Rule 144 are
also subject to certain manner of sale limitations, notice requirements and
the availability of current public information about the Company. A person (or
persons whose shares are aggregated) who is not deemed an "affiliate" of the
Company and who has beneficially owned restricted securities for at least
three years is entitled to sell such shares under Rule 144 without regard to
these volume or other limitations. Restricted securities properly sold in
reliance on Rule 144 are thereafter freely tradeable without restrictions or
registration under the Securities Act, unless thereafter held by an affiliate
of the Company.
Any employee, officer or director of or consultant to the Company who
purchased his or her shares pursuant to a written compensatory plan or
contract is entitled to rely on the resale provisions of Rule 701, which
permits nonaffiliates to sell their Rule 701 shares without having to comply
with the public-information, holding-period, volume-limitation or notice
provisions of Rule 144 and permits affiliates to sell their Rule 701 shares
without having to comply with Rule 144's holding-period restrictions, in each
case commencing 90 days after the closing of the Offering.
The Company intends to file a registration statement on Form S-8 under the
Securities Act to register shares of Common Stock reserved for issuance under
the 1996 Stock Plan and the Director Plan, thus permitting the resale of such
shares by nonaffiliates in the public market without restriction under the
Securities Act. Such registration statement is expected to become effective
soon after the date of this Prospectus.
Upon completion of the Offering, the holders of 6,054,240 shares of Common
Stock, in the aggregate, will have certain rights to have such shares
registered under the Securities Act. See "Description of Capital Stock--
Registration Rights."
CERTAIN INCOME TAX CONSIDERATIONS
GENERAL
The following summary of certain U.S. federal and Panamanian income tax
matters that may be relevant with respect to the acquisition, ownership and
disposition of shares of Common Stock was prepared by the Company and
reviewed, as such summary relates to United States income tax matters, by
Conner & Winters, A Professional Corporation, and, as such summary relates to
Panamanian tax matters, by Arias, Fabrega & Fabrega, Panamanian counsel to the
Company. This summary does not purport to be a complete analysis or listing of
all the potential tax consequences of holding Common Stock, nor does it
purport to furnish information in the level of detail or with attention to an
investor's specific tax circumstances that would be provided by an investor's
own tax advisor. Accordingly, prospective purchasers of Common Stock should
consult their own tax advisors as to the United States, Panamanian or other
state, local or foreign tax consequences to them of the acquisition, ownership
and disposition of Common Stock.
58
<PAGE>
UNITED STATES TAXES
This summary describes the principal United States federal income tax
consequences of the acquisition, ownership and disposition of shares of Common
Stock, but it does not purport to be a comprehensive description of all of the
tax considerations that may be relevant to a decision to acquire shares of
Common Stock. This summary applies only to holders that purchase Common Stock
in connection with the Offering and that will hold Common Stock as capital
assets. This summary does not address special classes of holders, such as a
broker-dealer, an insurance company, a tax-exempt organization, a financial
institution, an investor who holds Common Stock as part of a hedging or
conversion transaction, a holder whose "functional currency" is not the U.S.
dollar or a holder that owns (directly, indirectly or through attribution) 10%
or more of the voting shares of the Company. This summary also does not
consider the tax treatment of persons who will hold Common Stock through a
partnership or other pass-through entity.
This summary does not address any aspects of United States taxation other
than federal income taxation. Additionally, it does not address the United
States tax consequences were the Company determined to be a passive foreign
investment company ("PFIC") for United States federal income tax purposes.
Generally, a PFIC is a foreign corporation that either has passive income that
equals or exceeds 75% of its total gross income or has assets that produce or
are held for the production of passive income and represent at least 50% of
its total assets by fair market value. The Company does not believe it is
currently and does not expect to become a PFIC, but this conclusion is a
factual determination made annually and thus may be subject to change. U.S.
Holders, as defined below, should consult their own tax advisers concerning
the United States tax consequences of holding Common Stock were the Company
considered to be a PFIC.
This summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), judicial decisions, administrative pronouncements, and existing,
temporary and proposed Treasury regulations as in effect on the date of this
Prospectus, any of which are subject to change (possibly on a retroactive
basis) and to differing interpretations. Prospective purchasers of shares of
Common Stock should consult their own tax advisors as to the United States or
other tax consequences of the purchase, ownership and disposition of the
Common Stock in their particular circumstances, including the effect of any
state or local tax laws.
As used herein, the term "U.S. Holder" refers to a holder of shares of
Common Stock that is, for United States federal income tax purposes, (a) a
citizen or resident of the United States, (b) a corporation, partnership or
other entity organized or created in or under the laws of the United States or
any political subdivision thereof, or (c) otherwise subject to United States
federal income taxation with respect to the Common Stock (including a non-
resident alien individual or foreign corporation that holds, or is deemed to
hold, any share of Common Stock in connection with the conduct of a U.S. trade
or business).
Taxation of Distributions. To the extent paid out of current or accumulated
earnings and profits of the Company as determined under United States federal
income tax principles ("earnings and profits"), distributions (including any
withholding tax thereon) made with respect to shares of Common Stock (other
than certain distributions of capital stock of the Company or rights to
subscribe for shares of capital stock of the Company) will be includable in
income of a U.S. Holder as ordinary dividend income on the date such
distribution is received by the U.S. Holder. To the extent that a distribution
exceeds the Company's earnings and profits, it will be treated as a nontaxable
return of capital to the extent of the U.S. Holder's tax basis in the shares
of Common Stock and will reduce the U.S. Holder's tax basis in such shares,
but not below zero, and thereafter as a taxable capital gain. See "--United
States Taxes--Taxation of Capital Gains." The amount of the distribution will
equal the dollar value of the distribution received by the U.S. Holder, plus
the dollar value of any Panamanian taxes withheld from such distribution.
The Company does not expect to pay dividends for the foreseeable future.
Nonetheless, any distributions made with respect to the shares of Common Stock
out of earnings and profits generally will
59
<PAGE>
be treated as dividend income from sources outside the United States. U.S.
Holders that are corporations will not be entitled to the "dividends received
deduction" under Section 243 of the Code with respect to such dividends.
Distributions of dividend income made with respect to the shares of Common
Stock generally will be treated as "passive" income or, in the case of certain
U.S. Holders, "financial services income," for purposes of computing a U.S.
Holder's U.S. foreign tax credit. Alternatively, a U.S. Holder may elect to
claim a U.S. tax deduction for any Panamanian tax withheld, but only for a year
in which the U.S. Holder elects to do so with respect to all foreign income
taxes. In addition, a noncorporate U.S. Holder may not elect to deduct
Panamanian taxes if such U.S. Holder does not itemize deductions.
A holder of shares of Common Stock that is not a U.S. Holder (a "non-U.S.
Holder") generally will not be subject to United States federal income tax or
withholding tax on distributions received on shares of Common Stock that are
treated as dividend income for U.S. federal income tax purposes. A non-U.S.
Holder generally will not be subject to United States federal income tax or
withholding tax on distributions received on shares of Common Stock that are
treated as capital gains for United States federal income tax purposes, unless
such non-U.S. Holder would be subject to United States federal income tax on
gain realized on the sale of shares of Common Stock, as discussed below.
Taxation of Capital Gain. Gain or loss realized by a U.S. Holder on the sale
or other disposition of shares of Common Stock will be subject to United States
federal income tax as capital gain or loss in an amount equal to the difference
between the U.S. Holder's tax basis in the shares of Common Stock and the
amount realized on the disposition. Such gain or loss will be long term if the
Common Stock has been held for more than one year. Gain realized by a U.S.
Holder on the sale or other disposition of shares of Common Stock generally
will not be treated as foreign source income for U.S. foreign tax credit
purposes, unless the gain is attributable to an office or fixed place of
business maintained by the U.S. Holder outside the United States or is
recognized by an individual whose tax home is outside the United States, and
certain other conditions are met. The source of a loss attributable to the
taxable sale or other taxable disposition of Common Stock is uncertain at the
present time. Therefore, holders are encouraged to consult their tax advisors
regarding the proper treatment of such losses. Under proposed regulations, loss
realized by a U.S. Holder on the disposition of Common Stock would be foreign
source. For United States federal income tax purposes, capital losses are
subject to limitations on deductibility. As a general rule, U.S. Holders that
are corporations can use capital losses for a taxable year only to offset
capital gains in that year. A corporation may be entitled to carry back unused
capital losses to the three preceding tax years and to carry over losses to the
five following tax years. In the case of noncorporate U.S. Holders, capital
losses in a taxable year are deductible to the extent of any capital gains plus
ordinary income of up to $3,000. Unused capital losses of noncorporate U.S.
Holders may be carried over indefinitely.
A non-U.S. Holder of shares of Common Stock will not be subject to United
States federal income tax or withholding tax on gain realized on the sale or
other disposition of the shares of Common Stock unless such holder is an
individual who is present in the United States for 183 days or more in the
taxable year of the sale, and certain other conditions are met.
Information Reporting and Backup Withholding. Except as discussed below with
respect to backup withholding, dividends paid by the Company will not be
subject to U.S. withholding tax.
Information reporting to the U.S. Internal Revenue Service by paying agents
and custodians located in the United States will generally be required with
respect to payments to U.S. Holders of dividends on, and proceeds of sales of,
Common Stock. A U.S. Holder of Common Stock may be subject to backup
withholding at the rate of 31% with respect to dividends on, and proceeds of
sales of, Common Stock paid by such paying agents or custodians to such holder
unless the holder (i) is a corporation or comes within certain other exempt
categories and, when required, demonstrates this fact, or (ii) provides a
taxpayer identification number, certifies as to no loss of exemption from
backup withholding, and otherwise complies with applicable requirements of the
backup withholding rules. Any amounts withheld under the
60
<PAGE>
backup withholding tax rules from a payment to a U.S. Holder will be allowed as
a refund or a credit against such holder's U.S. federal income tax, provided
that the required information is furnished to the U.S. Internal Revenue
Service.
Dividends paid on shares of Common Stock to a holder that is not a U.S.
Holder are generally exempt from information reporting and backup withholding
under current law; however, such a holder should provide a properly completed
Form W-8 to secure such exemption.
There is no income tax treaty between Panama and the United States.
PANAMANIAN TAXES
The following summary of certain Panamanian tax matters is based upon the tax
laws of Panama and regulations thereunder, in effect as of the date of this
Prospectus and is subject to any subsequent change in Panamanian laws and
regulations which may come into effect after such date. The principal
Panamanian tax consequences of ownership of shares of Common Stock are as
follows.
General. Panama's income tax is exclusively territorial. Only income actually
derived from sources within Panama is subject to taxation. Income derived by
Panama or foreign corporations or individuals from off-shore operations is not
taxable. The territorial principle of taxation has been in force throughout the
history of the country and is supported by legislation, administrative
regulations and court decisions. The Company has not been in the past and does
not in the future expect to be subject to income taxes in Panama because all of
its income has arisen from activities conducted entirely outside Panama. This
is the case even though the Company maintains its registered office in Panama.
Taxation of Distributions and Capital Gains. There will be no Panamanian
taxes on distribution of dividends or capital gains realized by an individual
or corporation, regardless of its nationality or residency, on the sale or
other disposition of shares of Common Stock so long as the Company's assets are
held and activities are conducted entirely outside of Panama.
61
<PAGE>
UNDERWRITING
The names of the Underwriters of the shares of Common Stock offered hereby
and the aggregate number of shares which each has severally agreed to purchase
from the Selling Stockholders, subject to the terms and conditions specified
in the Underwriting Agreement, are as follows:
<TABLE>
<CAPTION>
NUMBER
UNDERWRITERS OF SHARES
------------ ---------
<S> <C>
Dillon, Read & Co. Inc...........................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................
---------
Total.......................................................... 6,000,000
=========
</TABLE>
The Managing Underwriters are Dillon Read and Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("Merrill Lynch"). As of the date of this Prospectus,
certain private investment partnerships managed by Dillon Read, and persons
related to Dillon Read, owned 4,223,040 shares of Common Stock of the Company
in the aggregate. Bryan H. Lawrence, a Managing Director of Dillon Read, and
Peter A. Leidel, a Senior Vice President of Dillon Read, have been members of
the Board of Directors of the Company since April 1992.
If any shares of Common Stock offered hereby are purchased by the
Underwriters, all such shares will be so purchased. The Underwriting Agreement
contains certain provisions whereby, if any Underwriter defaults in its
obligation to purchase such shares, and the aggregate obligations of the
Underwriters so defaulting do not exceed 10% of the shares offered hereby, the
remaining Underwriters, or some of them, must assume such obligations.
The shares of Common Stock offered hereby are being initially offered
severally by the Underwriters for sale at the price set forth on the cover
page hereof, or at such price less a concession not to exceed per share on
sales to certain dealers. The Underwriters may allow, and such dealers may
reallow, a
62
<PAGE>
concession not to exceed per share on sales to certain other dealers. The
offering of the shares of Common Stock is made for delivery when, as, and if
accepted by the Underwriters and subject to prior sale and to withdrawal,
cancellation or modification of the offer without notice. The Underwriters
reserve the right to reject any order for the purchase of the shares. After
the initial public offering, the public offering price, the concession and the
reallowance may be changed by the Managing Underwriters.
If the Underwriters exercise the over-allotment option referred to on the
cover page of this Prospectus to purchase from the Company up to an additional
900,000 shares of Common Stock, each of the Underwriters will be obligated,
subject to certain conditions, to purchase the number of additional shares of
Common Stock proportionate to such underwriter's initial commitment. The
Underwriters may exercise such option on or before the thirtieth day from the
date of the Underwriting Agreement and only to cover over-allotments made of
the shares in connection with the Offering.
Prior to the Offering, there has been no public market for the Common Stock.
In determining the initial public offering price, consideration was given,
among other things to (a) the market values of certain publicly-traded common
stocks of similar companies in relation to their book values, revenues,
earnings and cash flows; (b) the book value, revenues, earnings, cash flow and
operating history of the Company; (c) the current financial position of the
Company; (d) the experience of the Company's management; (e) the position of
the Company in its industry; and (f) the Company's prospects. Consideration
was also given to the general status of the securities market, the demand for
similar securities of comparable companies and other relevant factors.
The Company and all of the stockholders of the Company prior to the Offering
(other than Heerema which is offering all of its shares of Common Stock in the
Offering) have agreed not to sell, contract to sell, grant any option to sell,
or otherwise dispose of, directly or indirectly, any shares of Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock or
warrants or other rights to purchase Common Stock or permit the registration
of Common Stock, for a period of 180 days after the date of this Prospectus,
without the prior written consent of Dillon Read, except that the Company may,
without such consent, (a) grant options or issue Common Stock upon the
exercise of outstanding options pursuant to any of the Company's stock plans,
and (b) register the Common Stock and sell such shares pursuant to the
Offering.
Under the Conduct Rules of the NASD, when more than 10% of the net proceeds
of a public offering of equity securities, not including underwriting
compensation, are to be paid to a member of the NASD participating in such
public offering of equity securities or an affiliate of such member, the price
at which the equity securities are distributed to the public must be no higher
than that recommended by a "qualified independent underwriter" meeting certain
standards. Dillon Read is a member of the NASD and under NASD regulations
Yorktown, Concord II and Concord Japan are deemed to be its affiliates.
Yorktown, Concord II and Concord Japan are all Selling Stockholders in the
Offering and as a result will receive, in the aggregate, more than 10% of the
net proceeds from the Offering. As a result, the Offering is being made in
compliance with paragraph (8) of Rule 2710(c) of the Conduct Rules of the NASD
which relates to offerings where proceeds are directed to a member of the
NASD. Merrill Lynch will act as the qualified independent underwriter in
connection with the Offering and assume the customary responsibilities of
acting as a qualified independent underwriter in pricing and conducting due
diligence for the Offering. Merrill Lynch will not receive a fee for acting as
the "qualified independent underwriter."
The Company and the Selling Stockholders have agreed in the Underwriting
Agreement to indemnify the Underwriters and Merrill Lynch, as the qualified
independent underwriter, against certain liabilities, including liabilities
under the Securities Act, or to contribute to payments that the Underwriters
or Merrill Lynch, as the qualified independent underwriter, may be required to
make in respect thereof.
The Common Stock has been approved for listing on the New York Stock
Exchange under the symbol "WG." In order to meet one of the requirements for
listing the Common Stock on the New York Stock
63
<PAGE>
Exchange, the Underwriters have undertaken to distribute the shares of Common
Stock in such a manner so as to meet New York Stock Exchange distribution
standards for a U.S. offering.
The Underwriters do not intend to confirm sales to accounts over which they
exercise discretionary authority.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered by this
Prospectus will be passed upon for the Company by Arias, Fabrega & Fabrega,
Panama City, Republic of Panama. Certain other legal matters in connection
with the sale of the Common Stock offered hereby will be passed upon for the
Company by Conner & Winters, A Professional Corporation, Tulsa, Oklahoma,
U.S.A. Certain legal matters in connection with the sale of the Common Stock
offered hereby will be passed upon for the Underwriters by Cahill Gordon &
Reindel, a partnership including a professional corporation, New York, New
York, U.S.A.
EXPERTS
The consolidated financial statements and financial statement schedule of
the Company as of December 31, 1994 and 1995, and for each of the years in the
three-year period ended December 31, 1995, included herein and elsewhere in
the Registration Statement of which this Prospectus is a part have been
included herein and in such Registration Statement in reliance upon the
reports of KPMG Peat Marwick, independent certified public accountants,
appearing elsewhere herein and in such Registration Statement, and upon the
authority of said firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (the "Registration
Statement") under the Securities Act with respect to the Common Stock offered
hereby. This Prospectus, which is part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement and the
exhibits and schedules filed therewith. For further information with respect
to the Company and the Common Stock offered hereby, reference is hereby made
to the Registration Statement and the exhibits and schedules filed therewith.
Statements contained in this Prospectus regarding the contents of any contract
or any other document are not necessarily complete and, in each instance,
reference is hereby made to the copy of such contract or document filed as an
exhibit to the Registration Statement, each such statement being qualified in
all respects by such reference. The Registration Statement, including the
exhibits and schedules thereto, may be inspected without charge at the
principal office of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, and copies of all or any part thereof may be obtained at prescribed
rates from the Commission's Public Reference Section at the same address.
The Company intends to furnish its stockholders with annual reports
containing audited consolidated financial statements and quarterly reports for
the first three quarters of each fiscal year containing unaudited interim
financial information.
64
<PAGE>
ENFORCEABILITY OF CIVIL LIABILITIES
UNDER THE FEDERAL SECURITIES LAWS
The Company is a corporation organized under the laws of the Republic of
Panama. In addition, one of the directors of the Company is a resident of a
country other than the United States and the independent certified public
accountants of the Company are located outside of the United States.
Accordingly, it may not be possible to effect service of process on such
persons in the United States and to enforce judgments against such persons
predicated on the civil liability provisions of the federal securities laws of
the United States. Because a substantial amount of the assets of the Company
is located outside the United States, any judgment obtained in the United
States against the Company may not be fully collectible in the United States.
The Company has been advised by its counsel in the Republic of Panama, Arias,
Fabrega & Fabrega, that courts in the Republic of Panama will enforce foreign
judgments for liquidated amounts in civil matters, subject to certain
conditions and exceptions. However, courts in the Republic of Panama will not
enforce in original actions liabilities predicated solely on the United States
federal securities laws. WGI's agent for service of process in the United
States with respect to matters arising under the United States federal
securities laws is CT Corporation System, 1633 Broadway, New York, New York
10019.
65
<PAGE>
WILLBROS GROUP, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report.............................................. F-2
Consolidated Balance Sheets--December 31, 1994 and 1995 and March 31, 1996
(unaudited).............................................................. F-3
Consolidated Statements of Income--Years ended December 31, 1993, 1994 and
1995 and for the three months ended March 31, 1995 and 1996 (unaudited).. F-4
Consolidated Statements of Stockholders' Equity--Years ended December 31,
1993, 1994 and 1995 and for the three months ended March 31, 1996
(unaudited).............................................................. F-5
Consolidated Statements of Cash Flows--Years ended December 31, 1993, 1994
and 1995 and for the three months ended March 31, 1995 and 1996
(unaudited).............................................................. F-6
Notes to Consolidated Financial Statements................................ F-7
</TABLE>
F-1
<PAGE>
When the conversion of the Preferred Stock described in Note 15 in the
accompanying consolidated financial statements has been consummated, we will
be in a position to render the following report.
KPMG Peat Marwick
INDEPENDENT AUDITORS' REPORT
The Stockholders and Board of Directors
Willbros Group, Inc.:
We have audited the accompanying consolidated balance sheets of Willbros
Group, Inc. and subsidiaries (the "Company") as of December 31, 1994 and 1995
and the related consolidated statements of income, stockholders' equity, and
cash flows for each of the years in the three-year period ended December 31,
1995. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the aforementioned consolidated financial statements present
fairly, in all material respects, the financial position of Willbros Group,
Inc. and subsidiaries as of December 31, 1994 and 1995 and the results of
their operations and their cash flows for each of the years in the three-year
period ended December 31, 1995, in conformity with generally accepted
accounting principles in the United States.
Panama City, Panama
January 31, 1996, except as to Note 15,
which is as of July 15, 1996.
F-2
<PAGE>
WILLBROS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- MARCH 31,
1994 1995 1996
--------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.................. $ 49,142 $ 19,859 $ 22,288
Accounts receivable........................ 31,729 65,652 60,393
Contract cost and recognized income not yet
billed.................................... 718 11,515 8,359
Prepaid expenses........................... 2,275 1,992 2,728
--------- --------- ---------
Total current assets..................... 83,864 99,018 93,768
Spare parts, net............................. 4,212 4,615 4,630
Property, plant and equipment, net........... 41,948 44,318 43,089
Other assets................................. 1,164 2,003 2,225
--------- --------- ---------
Total assets............................. $ 131,188 $ 149,954 $ 143,712
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to banks..................... $ 5,828 $ 3,119 $ 2,574
Accounts payable and accrued liabilities... 32,085 41,015 33,569
Accrued income taxes....................... 6,459 4,918 4,358
Contract billings in excess of cost and
recognized income......................... 11,102 11,199 12,290
--------- --------- ---------
Total current liabilities................ 55,474 60,251 52,791
Deferred income taxes........................ 2,334 1,358 1,358
Other liabilities............................ 4,410 4,954 5,140
--------- --------- ---------
Total liabilities........................ 62,218 66,563 59,289
Stockholders' equity:
Class A Preferred Stock, par value $.01 per
share, 1,000,000 shares authorized, none
issued.................................... -- -- --
Common stock, par value $.05 per share,
35,000,000 shares authorized and
13,860,000 issued at March 31, 1996 and
December 31, 1995 (13,707,000 at December
31, 1994)................................. 685 693 693
Capital in excess of par value............. 40,453 41,224 41,224
Cumulative foreign currency translation
adjustment................................ (776) (784) (784)
Retained earnings.......................... 31,326 45,120 46,440
Notes receivable for stock purchases....... (2,395) (2,377) (2,363)
Treasury stock at cost, 123,000 shares at
March 31, 1996 and 78,000 shares at
December 31, 1995 (60,000 at December 31,
1994)..................................... (323) (485) (787)
--------- --------- ---------
Total stockholders' equity............... 68,970 83,391 84,423
--------- --------- ---------
Total liabilities and stockholders'
equity.................................. $ 131,188 $ 149,954 $ 143,712
========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE>
WILLBROS GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
---------------------------------- ----------------------
1993 1994 1995 1995 1996
---------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Contract revenues....... $210,011 $145,716 $220,506 $36,001 $53,479
Operating expenses:
Contract.............. 147,991 98,700 161,584 25,594 41,204
Depreciation and amor-
tization............. 16,672 14,598 15,193 3,634 3,190
General and adminis-
trative.............. 24,267 24,695 28,184 6,232 6,698
---------- ---------- ---------- ---------- ----------
188,930 137,993 204,961 35,460 51,092
---------- ---------- ---------- ---------- ----------
Operating income.... 21,081 7,723 15,545 541 2,387
Other income (expense):
Foreign exchange gain
(loss)............... 4,631 42 (331) (21) 244
Interest income....... 1,047 2,205 1,863 595 214
Minority interest..... (3,615) (1,758) (1,589) (238) (490)
Interest expense...... (1,832) (1,370) (1,719) (433) (354)
Other--net............ 936 71 (50) 138 326
---------- ---------- ---------- ---------- ----------
1,167 (810) (1,826) 41 (60)
---------- ---------- ---------- ---------- ----------
Income before income
taxes.............. 22,248 6,913 13,719 582 2,327
Provision (credit) for
income taxes........... 8,405 (4,146) (75) 465 283
---------- ---------- ---------- ---------- ----------
Net income.......... $ 13,843 $ 11,059 $ 13,794 $ 117 $ 2,044
========== ========== ========== ========== ==========
Net income per common
and common equivalent
share.................. $ 1.00 $ .79 $ .97 $ .01 $ .09
========== ========== ========== ========== ==========
Weighted average number
of common and common
equivalent shares
outstanding............ 13,872,691 13,981,201 14,215,181 14,241,181 14,148,181
========== ========== ========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
WILLBROS GROUP, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
CUMULATIVE NOTES
CAPITAL FOREIGN RECEIVABLE TOTAL
COMMON STOCK IN EXCESS CURRENCY FOR STOCK-
-------------------- OF PAR TRANSLATION RETAINED STOCK TREASURY HOLDERS'
SHARES PAR VALUE VALUE ADJUSTMENT EARNINGS PURCHASES STOCK EQUITY
---------- --------- --------- ----------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1,
1993................... 12,900,000 $645 $37,305 $(385) $ 9,198 $(1,742) $ -- $45,021
Net income............. -- -- -- -- 13,843 -- -- 13,843
Exercise of stock
warrants.............. 360,000 18 1,182 -- -- -- -- 1,200
Purchase of treasury
stock................. -- -- -- -- -- -- (88) (88)
Payment of notes
receivable............ -- -- -- -- -- 31 -- 31
Exercise of stock
options............... 75,000 4 309 -- -- (236) 88 165
Translation
adjustments........... -- -- -- (398) -- -- -- (398)
---------- ---- ------- ----- ------- ------- ----- -------
Balance, December 31,
1993................... 13,335,000 667 38,796 (783) 23,041 (1,947) -- 59,774
---------- ---- ------- ----- ------- ------- ----- -------
Net income............. -- -- -- -- 11,059 -- -- 11,059
Purchase of treasury
stock................. -- -- -- -- -- -- (323) (323)
Payment of notes
receivable............ -- -- -- -- -- 648 -- 648
Exercise of stock
options............... 372,000 18 1,657 -- -- (1,096) -- 579
Translation
adjustments........... -- -- -- 7 -- -- -- 7
Deemed dividend........ -- -- -- -- (2,774) -- -- (2,774)
---------- ---- ------- ----- ------- ------- ----- -------
Balance, December 31,
1994................... 13,707,000 685 40,453 (776) 31,326 (2,395) (323) 68,970
---------- ---- ------- ----- ------- ------- ----- -------
Net income............. -- -- -- -- 13,794 -- -- 13,794
Purchase of treasury
stock................. -- -- -- -- -- -- (376) (376)
Payment of notes
receivable............ -- -- -- -- -- 663 -- 663
Exercise of stock
options............... 153,000 8 771 -- -- (645) 214 348
Translation
adjustments........... -- -- -- (8) -- -- -- (8)
---------- ---- ------- ----- ------- ------- ----- -------
Balance, December 31,
1995................... 13,860,000 693 41,224 (784) 45,120 (2,377) (485) 83,391
---------- ---- ------- ----- ------- ------- ----- -------
Net income
(unaudited)........... -- -- -- -- 2,044 -- -- 2,044
Preferred dividends
(unaudited)........... -- -- -- -- (724) -- -- (724)
Purchase of treasury
stock (unaudited)..... -- -- -- -- -- -- (302) (302)
Payment of notes
receivable
(unaudited)........... -- -- -- -- -- 14 -- 14
---------- ---- ------- ----- ------- ------- ----- -------
Balance, March 31, 1996
(unaudited)............ 13,860,000 $693 $41,224 $(784) $46,440 $(2,363) $(787) $84,423
========== ==== ======= ===== ======= ======= ===== =======
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE>
WILLBROS GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
---------------------------- -----------------
1993 1994 1995 1995 1996
-------- -------- -------- -------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income................... $ 13,843 $ 11,059 $ 13,794 $ 117 $ 2,044
Reconciliation of net income
to cash provided by (used
in) operating activities:
Depreciation and
amortization............... 16,672 14,598 15,193 3,634 3,190
Compensation expense from
exercise of stock
options.................... 122 434 247 -- --
Loss (gain) on sales and
retirements................ (871) 394 592 (79) 7
Changes in operating assets
and liabilities:
Accounts receivable........ 9,765 (607) (33,923) (7,523) 5,259
Contract cost and
recognized income not yet
billed.................... (916) 2,308 (10,797) 170 3,156
Prepaid expenses and other
assets.................... 9 (679) (556) (1,548) (958)
Accounts payable and
accrued liabilities....... 3,220 (2,066) 8,930 419 (7,446)
Accrued income taxes....... 4,657 (9,977) (1,541) 119 (560)
Contract billings in excess
of cost and recognized
income.................... 18,934 (19,228) 97 (3,315) 1,091
Deferred income taxes...... 629 (207) (976) -- --
Other liabilities.......... 396 200 544 142 186
-------- -------- -------- -------- -------
Cash provided by (used
in) operating
activities.............. 66,460 (3,771) (8,396) (7,864) 5,969
Cash flows from investing
activities:
Proceeds from sales of
property and equipment...... 1,913 759 388 265 177
Purchase of property and
equipment................... (9,809) (3,703) (13,179) (3,005) (858)
Purchase of spare parts...... (6,725) (3,468) (5,767) (1,220) (1,302)
Purchase of CAMSA, net of
cash received of $663....... -- (6,757) -- -- --
-------- -------- -------- -------- -------
Cash used in investing
activities.............. (14,621) (13,169) (18,558) (3,960) (1,983)
Cash flows from financing
activities:
Proceeds from notes payable.. 4,570 11,211 6,530 1,070 7,843
Proceeds from common stock... 43 145 101 -- --
Collection of notes
receivable for stock
purchases................... 31 648 663 16 14
Proceeds from bank debt...... 5,000 -- -- -- --
Exercise of stock warrants... 1,200 -- -- -- --
Repayment of notes payable... (2,931) (7,952) (9,239) (1,564) (8,388)
Payment of dividends on
preferred stock............. -- -- -- -- (724)
Purchase of treasury stock... (88) (323) (376) (37) (302)
Repayment of stockholders'
debt........................ (10,000) -- -- -- --
Repayment of bank debt....... (6,000) (5,000) -- -- --
-------- -------- -------- -------- -------
Cash used in financing
activities.............. (8,175) (1,271) (2,321) (515) (1,557)
Effect of exchange rate
changes on cash and cash
equivalents.................. (398) 7 (8) -- --
-------- -------- -------- -------- -------
Cash provided by (used in) all
activities................... 43,266 (18,204) (29,283) (12,339) 2,429
Cash and cash equivalents,
beginning of period.......... 24,080 67,346 49,142 49,142 19,859
-------- -------- -------- -------- -------
Cash and cash equivalents, end
of period.................... $ 67,346 $ 49,142 $ 19,859 $ 36,803 $22,288
======== ======== ======== ======== =======
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE>
WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation--The consolidated financial statements include
the accounts of Willbros Group, Inc. ("WGI"), a Republic of Panama
corporation, and all majority-owned subsidiaries (the "Company"). WGI is owned
36% by Heerema Holding Construction, Inc. ("Heerema"), 32% by Dillon, Read &
Co. Inc. affiliates, and 32% by Company employees at December 31, 1995. All
material intercompany accounts and transactions are eliminated in
consolidation. The ownership interest of minority participants in subsidiaries
that are not wholly owned (principally in Nigeria and Oman) is included in
accounts payable and accrued liabilities and is not material. The minority
participants' share of the net income of those subsidiaries is included in
other expense.
The consolidated financial statements are prepared in accordance with
generally accepted accounting principles in the United States and include
certain estimates and assumptions that affect the reported amounts of assets
and liabilities, the disclosure of contingent assets and liabilities and the
reported amounts of revenues and expenses. Actual results could differ from
those estimates.
Accounts Receivable--Accounts receivable include retainage, all due within
one year, of $1,828 in 1994 and $2,654 in 1995 and are stated net of
allowances for bad debts of $2,442 in 1994 and $2,992 in 1995.
Spare Parts--Spare parts (excluding expendables), stated net of accumulated
depreciation of $10,270 in 1994 and $10,641 in 1995, are depreciated over
three years on the straight-line method.
Property, Plant and Equipment--Depreciation is provided on the straight-line
method using principally estimated lives of four to six years. When assets are
retired or otherwise disposed of, the cost and related accumulated
depreciation are removed from the accounts and any resulting gain or loss is
recognized in income for the period. Normal repair and maintenance costs are
charged to expense as incurred. Major overhaul costs are accrued and allocated
to contracts based on estimates of equipment condition at the end of the year.
Significant renewals and betterments are capitalized.
Revenues--Construction and engineering fixed-price contracts are accounted
for using the percentage- of-completion method. Under this method, estimated
contract revenues are accrued based generally on the percentage that costs to
date bear to total estimated costs, taking into consideration physical
completion. Estimated contract losses are recognized in full when determined.
Revenues from unit-price contracts are recognized as earned. Revenues from
change orders, extra work, variations in the scope of work and claims are
recognized when realization is assured.
Income Taxes--The Company accounts for income taxes by the asset and
liability method under which deferred tax assets and liabilities are
recognized for the future tax consequences of operating loss and tax credit
carryforwards and differences between the financial carrying value of assets
and liabilities and their tax bases.
Retirement Plans and Benefits--The Company has defined benefit and defined
contribution retirement plans and a postretirement medical benefits plan that
provide retirement benefits to substantially all regular employees. Qualified
plans are contributory on the part of employees. Pension costs are funded in
accordance with annual actuarial valuations. The Company records the cost of
postretirement medical benefits, which are funded on the pay-as-you-go basis,
over the employees' working lives.
F-7
<PAGE>
WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
Foreign Currency Translation--All significant asset and liability accounts
stated in currencies other than United States dollars are translated into
United States dollars at year-end exchange rates. Translation adjustments are
accumulated in a separate component of stockholders' equity. Revenue and
expense accounts are converted at prevailing rates throughout the year.
Foreign currency transaction adjustments and translation adjustments in highly
inflationary economies are recorded in income.
Cash Flows--In the determination of cash flows, all highly liquid debt
instruments are considered to be cash equivalents. The Company paid interest
of $1,770 in 1993, $1,377 in 1994 and $1,712 in 1995 and income taxes of
$3,117 in 1993, $2,227 in 1994 and $2,426 in 1995.
Income per Share--Primary income per share is calculated by dividing net
income, less any preferred dividend requirements, by the weighted average
number of common share and dilutive share equivalents (options and warrants),
outstanding during the year. Fully diluted income per share is calculated
assuming all shares and dilutive share equivalents are outstanding as of the
beginning of the year. There is no significant difference between primary and
fully diluted income per share. The weighted average number of common share
and share equivalents assumes that all common shares issued in the twelve
months ended May 31, 1996 were outstanding for all periods presented.
Interim Periods (Unaudited)--The accompanying consolidated balance sheet at
March 31, 1996 and the consolidated statements of income and of cash flows for
the three months ended March 31, 1995 and 1996 and the consolidated statement
of stockholders' equity for the three months ended March 31, 1996 are
unaudited. In the opinion of management, these interim period statements have
been prepared on the same basis as the audited financial statements and
include all adjustments, none of which were other than normal recurring
accruals, necessary for the fair presentation of financial position and
results of operations.
2. CONCENTRATION OF CREDIT RISK
The Company has a concentration of customers in the oil and gas industry
which exposes the Company to a concentration of credit risk within an
industry. The Company seeks to obtain advance and progress payments for
contract work performed on major contracts. Receivables are generally not
collateralized. The Company believes that its allowance for bad debts is
adequate.
3. CONTRACTS IN PROGRESS
Most contracts allow for progress billings to be made during performance of
the work. These billings may be made on a basis different from that used for
recognizing revenue. Contracts in progress for which cost and recognized
income exceed billings or billings exceed cost and recognized income consist
of:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------- MARCH 31,
1994 1995 1996
--------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Costs incurred on contracts in progress... $ 97,695 $ 73,928 $ 74,549
Recognized income......................... 35,801 3,359 3,588
--------- -------- --------
133,469 77,287 78,137
Progress billings and advance payments.... 143,880 76,971 82,068
--------- -------- --------
$ (10,384) $ 316 $ (3,931)
========= ======== ========
Contract cost and recognized income not
yet billed............................... $ 718 $ 11,515 $ 8,359
Contract billings in excess of cost and
recognized income........................ (11,102) (11,199) (12,290)
--------- -------- --------
$ (10,384) $ 316 $ (3,931)
========= ======== ========
</TABLE>
F-8
<PAGE>
WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, at cost, consist of:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------- MARCH 31,
1994 1995 1996
-------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Construction equipment....................... $ 30,124 $ 33,346 $ 33,370
Marine equipment............................. 17,899 23,100 23,448
Transportation equipment..................... 12,781 15,208 15,193
Land, buildings, furniture and equipment..... 8,290 8,677 8,891
-------- -------- --------
69,094 80,331 80,902
Less accumulated depreciation and amortiza-
tion........................................ 27,146 36,013 37,813
-------- -------- --------
$ 41,948 $ 44,318 $ 43,089
======== ======== ========
</TABLE>
5. NOTES PAYABLE TO BANKS
The Company has unsecured credit facilities in certain countries outside the
United States. Borrowings under these lines, in the form of short-term notes
and overdrafts, are made at competitive interest rates. Generally, each line
is available only for borrowings related to operations in a specific country.
Credit available under these facilities is approximately $10,200 at December
31, 1995 and $1,700 (unaudited) at March 31, 1996.
6. LINE OF CREDIT
The Company has a $100,000 credit agreement with a bank consortium which
provides for revolving loans and letters of credit. The aggregate of all
loans, together with all commercial and financial letters of credit issued
under the agreement, may not exceed the Company's tangible net worth. The
agreement limits the Company's ability to purchase its own stock, acquire
other companies and borrow outside the agreement, requires the Company to
maintain certain financial ratios and restricts dividend payments on common
stock. Principal is payable at termination (October 31, 1997) and interest is
payable quarterly at prime or, at the Company's option, other alternative
interest rates. The annual commitment fee is 3/8% on the unused portion of the
line. The agreement is secured by the stock of the principal subsidiaries of
the Company. There were no borrowings and outstanding letters of credit
totaled $35,178, of which $9,798 were commercial or financial, at December 31,
1995, and $28,068 (unaudited) at March 31, 1996 leaving amounts fully
available under the line of $64,822 at December 31, 1995 and $71,932
(unaudited) at March 31, 1996.
7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities consist of:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------- MARCH 31,
1994 1995 1996
-------- -------- ----------- ---
(UNAUDITED)
<S> <C> <C> <C> <C>
Trade payables........................... $ 18,090 $ 23,826 $ 18,860
Payrolls and payroll liabilities......... 8,701 13,452 11,204
Equipment reconditioning and overhaul re-
serves.................................. 5,294 3,737 3,505
-------- -------- --------
$ 32,085 $ 41,015 $ 33,569
======== ======== ========
</TABLE>
F-9
<PAGE>
WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
8. RETIREMENT PLANS
The Company has defined benefit plans (pension plans) covering substantially
all regular employees which are funded by employee and Company contributions.
The Company's funding policy is to contribute at least the minimum required by
the Employee Retirement Income Security Act of 1974 in accordance with annual
actuarial valuations. Benefits under the plans are determined by employee
earnings and credited service. Pension expense includes the following
components:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Service cost for benefits earned during the
period...................................... $ 1,081 $ 1,206 $ 915
Interest cost on projected benefit
obligation.................................. 1,391 1,447 1,608
Actual loss (gain) on plan assets............ (1,533) 550 (4,855)
Deferred gain (loss) on plan assets.......... 111 (2,169) 3,285
Amortization................................. 28 22 --
-------- -------- --------
$ 1,078 $ 1,056 $ 953
======== ======== ========
Accrued pension liability includes the following components:
<CAPTION>
DECEMBER 31,
----------------------------
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Projected benefit obligation over plan
assets:
Projected benefit obligation:
Vested benefits.......................... $ 15,268 $ 16,478 $ 20,477
Nonvested benefits....................... 882 510 505
-------- -------- --------
Accumulated benefits..................... 16,150 16,988 20,982
Related to future pay increases.......... 5,828 3,561 4,180
-------- -------- --------
21,978 20,549 25,162
Plan assets at fair value (primarily listed
stocks and bonds)......................... (18,753) (18,595) (23,660)
-------- -------- --------
3,225 1,954 1,502
Unrecognized net gain (loss)................. (2,619) (1,124) (499)
Unrecognized prior service cost.............. (313) (282) (253)
Transition asset at January 1, 1987.......... 229 201 172
-------- -------- --------
$ 522 $ 749 $ 922
======== ======== ========
</TABLE>
The projected benefit obligation is determined using a weighted average
discount rate of 7.0 percent at December 31, 1993, 8.0 percent at December 31,
1994 and 7.0 percent at December 31, 1995 and a rate of increase in future pay
increases of 6.5 percent at December 31, 1993, 6.0 percent at December 31,
1994 and 6.0 percent at December 31, 1995. The assets are expected to have a
long-term rate of return of 8.5 percent. The transition asset is amortized
over 15 years.
The Company has a defined contribution plan which is funded by participating
employee contributions and the Company. The Company matches employee
contributions up to a maximum of 5% of salary. Company contributions for this
plan were $556 in 1993, $487 in 1994 and $506 in 1995.
F-10
<PAGE>
WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
8. RETIREMENT PLANS--(CONTINUED)
Effective January 1, 1994, the Company established an Executive Benefit
Restoration Plan. The Plan partially restores benefits to certain executives
whose benefits under the defined benefit pension plans are reduced as a result
of limitations imposed by the Internal Revenue Code. Plan expense is $285 in
1994 and $303 in 1995 and plan liability, included in accounts payable and
accrued liabilities, is $285 at December 31, 1994 and $909 at December 31,
1995. The Company established a trust to fund benefit payments. Contributions
of assets to the trust by the Company are irrevocable but are subject to
creditor claims under certain conditions. Assets held in trust, included in
other assets, are $315 at December 31, 1994 and $605 at December 31, 1995.
9. POSTRETIREMENT MEDICAL BENEFITS
Postretirement medical benefit expense is $647 in 1993, $615 in 1994 and
$690 in 1995 and includes service cost of $322 in 1993, $269 in 1994 and $262
in 1995 and interest cost of $325 in 1993, $315 in 1994 and $405 in 1995 and
amortization of $31 in 1994 and $23 in 1995.
Accrued postretirement medical benefit liability includes the following
components:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------
1994 1995
------ ------
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees.................................................. $2,010 $2,062
Fully eligible active plan participants................... 753 562
Other active plan participants............................ 2,299 2,326
------ ------
Accumulated postretirement benefits..................... 5,062 4,950
Unrecognized net loss....................................... (771) (70)
------ ------
$4,291 $4,880
====== ======
</TABLE>
The non-current portion of the liability, $4,173 at December 31, 1994 and
$4,717 at December 31, 1995, is included in other liabilities.
The weighted average annual assumed rate of increase in the per capita cost
of covered benefits is 8.5 percent for 1996 and is assumed to decrease to 5.5
percent by the year 2010 and to remain at that level. The discount rate used
in determining the liability is 7.0 percent at December 31, 1993, 8.0 percent
at December 31, 1994 and 7.0 percent at December 31, 1995. Increasing the
assumed health care cost trend rates by one percentage point in each year
would increase the postretirement medical liability at December 31, 1995 by
$752 and expense for 1995 by $125.
10. INCOME TAXES
The provision (credit) for income taxes represents income taxes arising as a
result of operations and credits for revision of previous estimates of income
taxes payable in a number of countries. The Company is not subject to income
tax in Panama on income earned outside of Panama. All income has been earned
outside of Panama; therefore there is no expected relationship between income
(loss) before income taxes and the provision (credit) for income taxes. The
effective consolidated tax rate differs from the statutory tax rate in each
country because taxable income and operating losses from different countries
cannot be offset and tax rates and methods of determining taxes payable are
different in each country.
F-11
<PAGE>
WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
10. INCOME TAXES--(CONTINUED)
Income (loss) before income taxes and the provision (credit) for income
taxes in the Consolidated Statements of Income consist of:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------- --------------------
1993 1994 1995 1995 1996
------- ------- ------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Income (loss) before income
taxes:
Other countries............ $23,283 $12,303 $16,557 $1,029 $3,316
United States.............. (1,035) (5,390) (2,838) (447) (989)
------- ------- ------- --------- ---------
$22,248 $ 6,913 $13,719 $ 582 $2,327
======= ======= ======= ========= =========
Provision (credit) for income
taxes:
Currently payable:
Other countries.......... $ 7,491 $(3,942) $ 893 $ 464 $ 283
United States:
Federal................ 100 -- -- -- --
State.................. 185 3 8 1 --
------- ------- ------- --------- ---------
7,776 (3,939) 901 465 283
Deferred, other countries.. 629 (207) (976) -- --
------- ------- ------- --------- ---------
$ 8,405 $(4,146) $ (75) $ 465 $ 283
======= ======= ======= ========= =========
</TABLE>
The Company has a deferred tax asset in the United States of $18,630 at
December 31, 1994 and $19,436 at December 31, 1995 relating to United States
net operating loss and credit carryforwards and employee benefit expense, and
a deferred tax liability of $1,254 at December 31, 1994 and $1,485 at December
31, 1995 relating to excess tax depreciation. The net deferred tax asset is
reduced to zero by a valuation allowance. The Company has a deferred tax
liability in other countries of $2,334 at December 31, 1994 and $1,358 at
December 31, 1995 related to temporary differences, principally in contract
revenues and expenses.
The Company has $44,017 in United States net operating loss carryforwards
and $1,379 of United States investment tax credit carryforwards at December
31, 1995. The United States net operating loss carryforwards will expire,
unless utilized, beginning in 1996 and ending December 31, 2010. The
carryforwards available on an annual basis are limited. The Company has a
nonexpiring operating loss carryforward in the United Kingdom of $26,350
((Pounds)17,000) as of December 31, 1995.
11. NOTES RECEIVABLE FOR STOCK PURCHASES AND STOCK OWNERSHIP PLANS
Under employee stock ownership plans established in 1992 and 1995, certain
key employees are issued options to purchase common stock at a discount from
fair value and are allowed to finance up to 90% of the option price with
three-year non-interest bearing recourse notes. Options were issued to
purchase 372,000 shares of common stock at $3.33 per share in 1994 and 195,000
shares (including 42,000 treasury shares) of common stock at $3.83 per share
in 1995. During May 1996, options were issued to purchase 428,760 shares of
common stock, all from treasury stock, at $4.53. The discounts from fair value
were recorded as additional compensation and all options were exercised
shortly after issuance.
F-12
<PAGE>
WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
11. NOTES RECEIVABLE FOR STOCK PURCHASES AND STOCK OWNERSHIP PLANS--
(CONTINUED)
During May 1996, the Company established the Willbros Group, Inc. 1996 Stock
Plan (the "1996 Plan") which provides for awards to key employees of the
Company. The 1996 Plan has 1,125,000 shares of common stock authorized and
reserved for issuance. No awards have been granted. The Company also
established the Willbros Group, Inc. Director Stock Plan (the "Director Plan")
which provides for the grant of stock options to non-employee directors. The
Director Plan has 125,000 shares of common stock authorized and reserved for
issuance. No options have been granted.
12. ACQUISITION
Effective May 1, 1994, the Company acquired 100 percent of the shares of
Construcciones Acuaticas Mundiales, S.A. ("CAMSA"), a Venezuelan company, from
an affiliate of Heerema for $7,300 cash in a transaction accounted for as a
purchase. Accordingly, the Company has made allocations of the purchase price
and $120 in transaction fees among acquired assets and liabilities based on
their respective fair values at the date of purchase. The net assets of CAMSA
included $663 of cash. Heerema's residual interest in CAMSA was reduced to its
previous carrying value by a deemed dividend. Pro forma net income of the
Company assuming the acquisition occurred at January 1, 1993 is not materially
different from historical results for the years ended December 31, 1993 and
1994.
13. SEGMENT INFORMATION
The Company operates in a single industry segment. The main lines of
business include construction, engineering and specialty services to the oil
and gas industry. Due to a limited number of major projects and clients, the
Company may have a substantial part of its operations dedicated to one
project, client and country.
Customers with more than 10% of contract revenues are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
Customer A................................... 26% 29% 32%
Customer B................................... 14 2 --
Customer C................................... -- -- 13
------- ------- -------
40% 31% 45%
======= ======= =======
</TABLE>
F-13
<PAGE>
WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
13. SEGMENT INFORMATION--(CONTINUED)
Information about the Company's operations in different geographic areas is
shown below:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Contract Revenues: (1)
Africa....................................... $ 87,215 $ 68,908 $ 95,972
Asia......................................... -- -- 29,728
C.I.S........................................ 4,851 540 1,283
Middle East.................................. 60,006 23,469 21,870
North America................................ 57,939 48,061 52,100
South America................................ -- 4,738 19,553
-------- -------- --------
$210,011 $145,716 $220,506
======== ======== ========
Operating profit (loss): (2)
Africa....................................... $ 21,449 $ 22,917 $ 26,163
Asia......................................... (169) (582) (1,590)
C.I.S........................................ 633 (797) 548
Middle East.................................. 13,569 6,290 1,289
North America................................ 83 (3,591) (795)
South America................................ (632) (2,882) 3,898
-------- -------- --------
$ 34,933 $ 21,355 $ 29,513
======== ======== ========
Identifiable assets:
Africa....................................... $ 44,245 $ 37,211 $ 63,281
Asia......................................... 1 -- 20,498
C.I.S........................................ 711 174 690
Middle East.................................. 22,901 13,626 15,543
North America................................ 84,167 67,375 36,160
South America................................ 34 12,802 13,782
-------- -------- --------
$152,059 $131,188 $149,954
======== ======== ========
</TABLE>
- --------
(1) Net of inter-geographic area revenues in North America of $5,544 in 1993,
$2,001 in 1994 and $4,986 in 1995.
(2) Operating profit (loss) is before deducting general corporate expenses of
$13,852 in 1993, $13,632 in 1994 and $13,968 in 1995.
14. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of financial instruments does not materially differ from
fair value.
15. INITIAL PUBLIC OFFERING
On June 7, 1996, the Company filed a registration statement with the
Securities and Exchange Commission relating to the initial public offering of
6,000,000 shares of its common stock. The Company will not receive any of the
proceeds from the sale. In May 1996, the Company effected a 30-for-1 split of
its
F-14
<PAGE>
WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
15. INITIAL PUBLIC OFFERING--(CONTINUED)
common stock; 362,000 shares of preferred stock outstanding prior to the
offering have been converted to common stock so that 13,860,000 shares of
common stock are outstanding.
The share and per share amounts in the accompanying financial statements
have been adjusted to retroactively include all shares issued during the
twelve months prior to May 31, 1996 and to reflect the common stock split and
the conversion of the preferred stock for all periods presented.
16. CONTINGENCIES, COMMITMENTS AND OTHER CIRCUMSTANCES
The Company provides construction, engineering and specialty services to the
oil and gas industry. The Company's principal markets are currently Africa,
the Middle East, South America and the United States. Operations outside the
United States may be subject to certain risks which ordinarily would not be
expected to exist in the United States, including foreign currency
fluctuations, expropriation of assets, civil uprisings and riots, instability
of government and legal systems of decrees, laws, regulations, interpretations
and court decisions which are not always fully developed and which may be
retroactively applied. Management is not presently aware of any events of the
type described in the countries in which it operates that have not been
provided for in the accompanying consolidated financial statements. Based upon
the advice of knowledgeable professionals in the various work countries
concerning the interpretation of the laws, practices and customs of the
countries in which it operates, management believes the Company has followed
the current practices in those countries; however, because of the nature of
these potential risks, there can be no assurance that the Company may not be
adversely affected by them in the future. The Company insures substantially
all of its equipment in countries outside the United States against certain
political risks and terrorism. As of December 31, 1995, the Company had 86
percent (81 percent in 1994) of its assets outside of the United States.
The Company has the usual liability of contractors for the completion of
contracts and the warranty of its work. Where work is performed through a
joint venture, the Company also has possible liability for the contract
completion and warranty responsibilities of its joint venturers. Management is
not aware of any material exposure related thereto which has not been provided
for in the accompanying consolidated financial statements.
Certain post contract completion audits and reviews are being conducted by
clients and/or government entities. While there can be no assurance that
claims will not be received as a result of such audits and reviews, management
does not believe a legitimate basis for any material claims exists. At the
present time it is not possible for management to estimate the likelihood of
such claims being asserted or, if asserted, the amount or nature thereof.
The Company has an obligation to purchase, under certain conditions, stock
held by retiring or terminating employees at a formula price. The obligation
terminates upon the effectiveness of an initial public offering. Provisions of
the notes receivable for stock purchases entitle employees to sell stock to
the Company at book value or less under certain circumstances.
The Company has certain operating leases for office and camp facilities.
Rental expense, excluding daily rentals and reimbursable rentals under cost
plus contracts, was $2,018 in 1993, $1,876 in 1994 and $1,896 in 1995. Minimum
lease commitments under operating leases as of December 31, 1995, total
$10,278 and are payable as follows: 1996, $1,596; 1997, $960; 1998, $1,355;
1999, $1,460; 2000, $1,473; later years, $3,434.
F-15
<PAGE>
[PICTURE OF COMPANY ADVERTISEMENT]
ISO 9000 Certifications
[PICTURE OF CERTIFICATES OF REGISTRATION (ISO 9000)]
WILLBROS MISSION IS . . .
To provide - anytime, anywhere - safe, efficient and extraordinarily competent
services to our worldwide clients in a manner which justifies employee pride
and customer confidence.
[LOGO]
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMA-
TION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPEC-
TUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHO-
RIZED BY THE COMPANY, THE SELLING STOCKHOLDERS OR ANY UNDERWRITER. THIS PRO-
SPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO
BUY, SHARES OF COMMON STOCK IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
NOT LAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION OR IN
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UN-
DER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 3
Risk Factors............................................................. 8
Use of Proceeds.......................................................... 13
Dividend Policy.......................................................... 14
Capitalization........................................................... 14
Dilution................................................................. 15
Selected Consolidated Financial and Other Data........................... 16
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 18
Business................................................................. 23
Management............................................................... 42
Certain Transactions..................................................... 53
Principal and Selling Stockholders....................................... 54
Description of Capital Stock............................................. 55
Shares Eligible for Future Sale.......................................... 57
Certain Income Tax Considerations........................................ 58
Underwriting............................................................. 62
Legal Matters............................................................ 64
Experts.................................................................. 64
Additional Information................................................... 64
Enforceability of Civil Liabilities Under the Federal Securities Laws.... 65
Index to Consolidated Financial Statements............................... F-1
</TABLE>
----------------
UNTIL , 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT PARTICI-
PATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS
IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING
AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[LOGO OF WILLBROS GROUP APPEARS HERE]
WILLBROS GROUP, INC.
----------------
6,000,000 SHARES
COMMON STOCK
PROSPECTUS
, 1996
----------------
DILLON, READ & CO. INC.
MERRILL LYNCH & CO.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
All amounts which are payable by the Registrant, except SEC, NASD and New
York Stock Exchange fees, are estimates.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee................ $30,932
NASD filing fee.................................................... 9,470
New York Stock Exchange listing fee................................ *
Transfer agent's fees and expenses................................. *
Printing, engraving and shipping expenses.......................... *
Legal fees and expenses............................................ *
Blue sky fees and expenses (including legal fees).................. *
Accounting fees and expenses....................................... *
Miscellaneous...................................................... *
-------
Total............................................................ $ *
=======
</TABLE>
- --------
* To be supplied by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 64 of the General Corporation Law of Panama (the "PGCL") provides
that directors shall be liable to creditors of the Registrant for authorizing
a dividend or distribution of assets with knowledge that such payments impair
the Registrant's capital or for making a false report or statement in any
material respect. In addition, Article 444 of the Panama Code of Commerce
("Article 444") provides that directors are not personally liable for the
Registrant's obligations, except for liability to the Registrant and third
parties for the effectiveness of the payments to the Registrant made by
stockholders, the existence of dividends declared, the good management of
accounting, and in general, for execution or deficient performance of their
mandate or the violation of laws, the Articles of Incorporation, the By-laws
or resolutions of the stockholders. Article 444 provides that the liability of
directors may only be claimed pursuant to a resolution of the stockholders.
The PGCL does not address the issue as to whether or not a corporation may
eliminate or limit a director's, officer's or agent's liability to the
corporation. Nevertheless, Arias, Fabrega & Fabrega, Panama counsel to the
Registrant, has advised the Registrant that, as between the Registrant and its
directors, officers and agents, such liability may be released under general
contract principles, to the extent that a director, officer or agent, in the
performance of his duties to the corporation, has not acted with gross
negligence or malfeasance. This release may be included in the Articles of
Incorporation or By-laws of the Registrant or in a contract entered into
between the Registrant and the director, officer or agent. While such a
release may not be binding with respect to a third person or stockholder
claiming liability under Article 444, in order to claim such liability, a
resolution of the stockholders would be necessary, which the Registrant
believes would be difficult to secure in the case of a publicly held company.
The PGCL does not address the extent to which a corporation may indemnify a
director, officer or agent. However, the Registrant's Panama counsel has
advised the Registrant that, under general agency principles, an agent, which
would include directors and officers, may be indemnified against liability to
third persons, except for a claim based on Article 64 of the PGCL or for
losses due to gross negligence or malfeasance in the performance of such
agent's duties. The Registrant's Restated Articles of Incorporation release
directors from personal liability to the Registrant or its stockholders for
breach of fiduciary duty and authorize the Registrant's Board of Directors to
adopt By-laws or resolutions to this effect or to cause the Registrant to
enter into contracts providing for limitation of liability and for
indemnification of directors, officers and agents. The Registrant's Restated
By-laws provide for indemnification of directors
II-1
<PAGE>
and officers of the Registrant to the full extent permitted by, and in the
manner permissible under, the laws of the Republic of Panama. The Registrant
has also entered into specific agreements with its directors and officers
providing for indemnification of such persons under certain circumstances.
The preceding discussion is subject to the Registrant's Restated Articles of
Incorporation and Restated By-laws and the provisions of Article 64 of the
PGCL and Article 444 as applicable. It is not intended to be exhaustive and is
qualified in its entirety by the Registrant's Restated Articles of
Incorporation, the Registrant's Restated By-laws and Article 64 of the PGCL
and Article 444.
The form of Underwriting Agreement included as Exhibit 1 provides for
indemnification of the Registrant and certain controlling persons under
certain circumstances, including liabilities under the Securities Act of 1933,
as amended (the "Securities Act").
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
The following information is furnished as to securities of the Registrant
sold within the past three years which were not registered under the
Securities Act. Each of the issuances and sales described below was effected
and relies upon an exemption from registration as set forth below. No
underwriting discounts or commissions were paid in connection with such sales.
All references in this Item 15 to the number of shares of Common Stock and to
common stock per share data have been restated to reflect a 30-for-1 stock
split effected on May 27, 1996.
1. Within the past three years, the Registrant has granted stock options,
all of which have been exercised, for the purchase of a total of 786,000
shares of Common Stock, pursuant to the Registrant's employee non-qualified
stock ownership plans. Such options were issued to employees of the Registrant
in reliance on an exemption from registration under the Securities Act,
pursuant to Rule 701 promulgated under the Securities Act for securities
issued under compensatory plans, as follows:
<TABLE>
<CAPTION>
PER SHARE
DATE OF EXERCISE NUMBER OF SHARES EXERCISE PRICE
---------------- ---------------- --------------
<S> <C> <C>
October 11, 1993 96,000 $2.90
October 27, 1994 223,500 3.33
November 4, 1994 148,500 3.33
October 31, 1995 91,500 3.83
November 15, 1995 103,500 3.83
May 8, 1996 123,000 4.53
</TABLE>
2. On May 8, 1996, the Registrant granted stock options, all of which have
been exercised, for the purchase of a total of 150,000 shares of Common Stock
and 5,192 shares of Preferred Stock, at per share exercise prices of $4.53 and
$136, respectively, pursuant to the Registrant's management personnel non-
qualified stock ownership plans. Such options were issued to officers and key
employees of the Registrant in reliance on an exemption from registration
under the Securities Act, pursuant to Rule 701 promulgated under the
Securities Act for securities issued under compensatory plans.
3. On September 30, 1993, certain subordinated notes of the Registrant, in
an aggregate principal amount of $10 million, were prepaid in full, and
certain warrants which had been issued in connection with such subordinated
notes, representing the right to acquire 12,000 shares of Preferred Stock in
the aggregate, at an exercise price of $100 per share, were exercised. Such
notes and warrants were issued by the Registrant in 1992 and were held by
Heerema, the Yorktown and Concord Investors and certain members of the
Registrant's management. Exemption from registration under the Securities Act
for such transaction is claimed under Section 4(2) of the Securities Act for
transactions by an issuer not involving any public offering, or in a certain
instance, under Regulation S under the Securities Act for transactions made
outside the United States.
II-2
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits*:
The following is a list of all exhibits filed as a part of this Registration
Statement on Form S-1.
<TABLE>
<C> <S>
1.** Form of Underwriting Agreement.
3.1*** Restated Articles of Incorporation of the Registrant.
3.2** Restated By-laws of the Registrant.
4.** Form of stock certificate for the Registrant's Common Stock,
par value $.05 per share.
5.1** Opinion of Arias, Fabrega & Fabrega, regarding the legality of
the Common Stock.
10.1*** Credit Agreement dated September 16, 1993, among the
Registrant, Willbros International, Inc., Willbros USA, Inc.,
Willbros Engineering & Construction Limited, certain
designated subsidiaries, certain financial institutions, and
Bank of America National Trust and Savings Association, as
agent.
10.2*** First Amendment to Credit Agreement dated November 30, 1994,
among the Registrant, Willbros International, Inc., Willbros
USA, Inc., Willbros Engineering & Construction Limited,
certain designated subsidiaries, certain financial
institutions, and Bank of America National Trust and Savings
Association, as agent.
10.3** Employment Agreement dated January 1, 1996, by and among
Willbros USA, Inc., Larry J. Bump and the Registrant.
10.4** Employment Agreement dated January 1, 1996, by and among
Willbros USA, Inc., Melvin F. Spreitzer and the Registrant.
10.5** Employment Agreement dated January 1, 1996, by and among
Willbros USA, Inc., Gary L. Bracken and the Registrant.
10.6** Employment Agreement dated January 1, 1996, by and among
Willbros USA, Inc., M. Kieth Phillips and the Registrant.
10.7*** Form of Indemnification Agreement between the Registrant and
its officers.
10.8*** Willbros Group, Inc. 1996 Stock Plan.
10.9*** Willbros Group, Inc. Director Stock Plan.
10.10*** Willbros USA, Inc. Executive Benefit Restoration Plan.
10.11*** Form of Secured Promissory Note under the Willbros
International, Inc. and Willbros USA, Inc. 1995 Management
Personnel Non-Qualified Stock Ownership Plans.
10.12*** Form of Secured Promissory Note under the Willbros
International, Inc. and Willbros USA, Inc. 1992 Employee Non-
Qualified Stock Ownership Plans.
10.13*** Registration Rights Agreement dated April 9, 1992, between the
Registrant and Heerema Holding Construction, Inc., Yorktown
Energy Partners, L.P., Concord Partners II, L.P., Concord
Partners Japan, Limited and certain other stockholders of the
Registrant.
10.14*** Stock Purchase Agreement dated May 1, 1994, between Willbros
Suramerica, S.A. and Inversiones 252-28, C.A., providing for
the purchase of Construcciones Acuaticas Mundiales, S.A.
(CAMSA).
10.15** Stock Purchase Agreement dated April 9, 1992, between Willbros
Acquisition Corp. and Heerema Holding Construction, Inc.,
providing for the purchase of stock of Willbros Group, Inc.
10.16** Form of Indemnification Agreement between the Registrant and
its directors.
</TABLE>
II-3
<PAGE>
<TABLE>
<C> <S>
10.17** Willbros Engineers, Inc. Management Incentive Plan dated January
1, 1996.
10.18** Willbros USA, Inc. Management Incentive Plan dated January 1,
1996.
21.*** Subsidiaries of the Registrant.
23.1** Consent of KPMG Peat Marwick.
23.2** Consent of Arias, Fabrega & Fabrega (included in the opinion
filed as Exhibit 5.1 to this Registration Statement).
23.3** Consent of Conner & Winters, a Professional Corporation.
24.*** Power of Attorney (included in this Part II).
27.*** Financial Data Schedule.
</TABLE>
- --------
*Exhibits excluded are not applicable.
** Filed herewith.
***Previously filed with this Registration Statement on June 7, 1996.
(b) Financial Statement Schedules:
Index to Consolidated Financial Statement Schedule
Independent Auditors' Report
II--Consolidated Valuation and Qualifying Accounts
All other schedules are omitted as inapplicable or because the required
information is contained in the financial statements or included in the
footnotes thereto.
ITEM 17. UNDERTAKINGS.
(f) The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.
(h) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions referred to in Item 14 of this
Registration Statement, 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 Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
(i) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
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 shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, 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.
II-4
<PAGE>
SIGNATURES
THE REGISTRANT. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT HAS DULY CAUSED THIS AMENDMENT NO. 1 TO REGISTRATION STATEMENT
TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN
THE CITY OF DALLAS, STATE OF TEXAS, ON THE 11TH DAY OF JULY, 1996.
Willbros Group, Inc.
/s/ Larry J. Bump
By: _________________________________
LARRY J. BUMP
CHAIRMAN OF THE BOARD, PRESIDENT,
CHIEF EXECUTIVE OFFICER AND CHIEF
OPERATING OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS
IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Larry J. Bump Director, Chairman of the July 11,
_________________________________ Board, President, Chief 1996
LARRY J. BUMP Executive Officer and Chief
Operating Officer (Principal
Executive Officer and
Authorized Representative in
the United States)
/s/ Melvin F. Spreitzer Director, Executive Vice July 11,
_________________________________ President, Chief Financial 1996
MELVIN F. SPREITZER Officer and Treasurer
(Principal Financial Officer
and Principal Accounting
Officer)
Guy E. Waldvogel* Director July 11,
_________________________________ 1996
GUY E. WALDVOGEL
Bryan H. Lawrence* Director July 11,
_________________________________ 1996
BRYAN H. LAWRENCE
Peter A. Leidel* Director July 11,
_________________________________ 1996
PETER A. LEIDEL
/s/ John N. Hove
*By:
_____________________________
JOHN N. HOVE
ATTORNEY-IN-FACT
II-5
<PAGE>
WILLBROS GROUP, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENT SCHEDULE
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report on Consolidated Financial Statement
Schedule................................................................ S-2
Schedule II--Consolidated Valuation and Qualifying Accounts.............. S-3
</TABLE>
S-1
<PAGE>
When the conversion of the Preferred Stock described in Note 15 in the
accompanying consolidated financial statements has been consummated, we will
be in a position to render the following report.
KPMG Peat Marwick
INDEPENDENT AUDITORS' REPORT ON CONSOLIDATED FINANCIAL STATEMENT SCHEDULE
The Stockholders and Board of Directors
Willbros Group, Inc.:
The audits referred to in our report dated January 31, 1996, except as to
Note 15, which is as of July 15, 1996, included the related consolidated
financial statement schedule for each of the years in the three-year period
ended December 31, 1995, included in the registration statement. This
consolidated financial statement schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion on the
consolidated financial statement schedule based on our audits. In our opinion,
such consolidated financial statement schedule, when considered in relation to
the basic consolidated financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.
Panama City, Panama
January 31, 1996
S-2
<PAGE>
WILLBROS GROUP, INC.
SCHEDULE II--CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
<TABLE>
<CAPTION>
BALANCE AT CHARGED TO BALANCE AT
YEAR BEGINNING COSTS AND CHARGE OFFS END OF
ENDED DESCRIPTION OF YEAR EXPENSES AND OTHER YEAR
----- ----------------------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
December
31, 1993 Allowance for bad debts $ 733 $ 945 $(326) $1,352
December
31, 1994 Allowance for bad debts $1,352 $1,086 $ 4 $2,442
December
31, 1995 Allowance for bad debts $2,442 $ 694 $(144) $2,992
</TABLE>
S-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
1.** Form of Underwriting Agreement.
3.1*** Restated Articles of Incorporation of the Registrant.
3.2** Restated By-laws of the Registrant.
4.** Form of stock certificate for the Registrant's Common Stock,
par value $.05 per share.
5.1** Opinion of Arias, Fabrega & Fabrega, regarding the legality of
the Common Stock.
10.1*** Credit Agreement dated September 16, 1993, among the
Registrant, Willbros International, Inc., Willbros USA, Inc.,
Willbros Engineering & Construction Limited, certain
designated subsidiaries, certain financial institutions, and
Bank of America National Trust and Savings Association, as
agent.
10.2*** First Amendment to Credit Agreement dated November 30, 1994,
among the Registrant, Willbros International, Inc., Willbros
USA, Inc., Willbros Engineering & Construction Limited,
certain designated subsidiaries, certain financial
institutions, and Bank of America National Trust and Savings
Association, as agent.
10.3** Employment Agreement dated January 1, 1996, by and among
Willbros USA, Inc., Larry J. Bump and the Registrant.
10.4** Employment Agreement dated January 1, 1996, by and among
Willbros USA, Inc., Melvin F. Spreitzer and the Registrant.
10.5** Employment Agreement dated January 1, 1996, by and among
Willbros USA, Inc., Gary L. Bracken and the Registrant.
10.6** Employment Agreement dated January 1, 1996, by and among
Willbros USA, Inc., M. Kieth Phillips and the Registrant.
10.7*** Form of Indemnification Agreement between the Registrant and
its officers.
10.8*** Willbros Group, Inc. 1996 Stock Plan.
10.9*** Willbros Group, Inc. Director Stock Plan.
10.10*** Willbros USA, Inc. Executive Benefit Restoration Plan.
10.11*** Form of Secured Promissory Note under the Willbros
International, Inc. and Willbros USA, Inc. 1995 Management
Personnel Non-Qualified Stock Ownership Plans.
10.12*** Form of Secured Promissory Note under the Willbros
International, Inc. and Willbros USA, Inc. 1992 Employee Non-
Qualified Stock Ownership Plans.
10.13*** Registration Rights Agreement dated April 9, 1992, between the
Registrant and Heerema Holding Construction, Inc., Yorktown
Energy Partners, L.P., Concord Partners II, L.P., Concord
Partners Japan, Limited and certain other stockholders of the
Registrant.
10.14*** Stock Purchase Agreement dated May 1, 1994, between Willbros
Suramerica, S.A. and Inversiones 252-28, C.A., providing for
the purchase of Construcciones Acuaticas Mundiales, S.A.
(CAMSA).
10.15** Stock Purchase Agreement dated April 9, 1992, between Willbros
Acquisition Corp. and Heerema Holding Construction, Inc.,
providing for the purchase of stock of Willbros Group, Inc.
10.16** Form of Indemnification Agreement between the Registrant and
its directors.
10.17** Willbros Engineers, Inc. Management Incentive Plan dated
January 1, 1996.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
10.18** Willbros USA, Inc. Management Incentive Plan dated January 1,
1996.
21.*** Subsidiaries of the Registrant.
23.1** Consent of KPMG Peat Marwick.
23.2** Consent of Arias, Fabrega & Fabrega (included in the opinion
filed as Exhibit 5.1 to this Registration Statement).
23.3** Consent of Conner & Winters, a Professional Corporation.
24.*** Power of Attorney (included in this Part II).
27.*** Financial Data Schedule.
</TABLE>
- --------
** Filed herewith.
***Previously filed with this Registration Statement on June 7, 1996.
<PAGE>
EXHIBIT 1
[FORM OF UNDERWRITING AGREEMENT]
WILLBROS GROUP, INC.
6,000,000 Shares
Common Stock
($.05 par value)
UNDERWRITING AGREEMENT
, 1996
DILLON, READ & CO. INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
as Managing Underwriters
c/o Dillon, Read & Co. Inc.
535 Madison Avenue
New York, New York 10022
Dear Sirs:
The persons named in Schedule B annexed hereto (the
"Selling Stockholders") propose to sell to the underwriters
named in Schedule A annexed hereto (the "Underwriters") an
aggregate of 6,000,000 shares (the "Firm Shares") of Common
Stock, $.05 par value (the "Common Stock"), of Willbros Group,
Inc. (the "Company"), in the respective amounts set forth under
the caption "Firm Shares" in Schedule B annexed hereto. In
addition, solely for the purpose of covering over-allotments,
the Company proposes to grant to the Underwriters the option to
purchase from the Company up to an additional 900,000 shares of
Common Stock (the "Additional Shares"). The Firm Shares and
the Additional Shares are hereinafter collectively referred to
as the "Shares". The Shares are described in the Prospectus
which is referred to below.
The Company has filed, in accordance with the
provisions of the U.S. Securities Act of 1933, as amended, and
the rules and regulations thereunder (the "Act"), with the
Securities and Exchange Commission (the "Commission") a
registration statement on Form S-1, including a prospectus,
relating to the Shares. The Company has furnished to you, for
use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses (each thereof being herein called a
"Preliminary
<PAGE>
-2-
Prospectus") relating to the Shares. Except where the context
otherwise requires, the registration statement, as amended when
it becomes effective, including all documents filed as a part
thereof, and including any information contained in a prospectus
subsequently filed with the Commission pursuant to Rule 424(b)
under the Act and deemed to be part of the registration statement
at the time of effectiveness pursuant to Rule 430(A) under the
Act, is herein called the "Registration Statement", and the
prospectus, in the form filed by the Company with the Commission
pursuant to Rule 424(b) under the Act or, if no such filing is
required, the form of final prospectus included in the
Registration Statement at the time it became effective, is herein
called the "Prospectus".
The Company, the Selling Stockholders and the
Underwriters agree as follows:
1. (a) Sale and Purchase. Upon the basis of the
-----------------
warranties and representations and the other terms and
conditions herein set forth, each of the Selling Stockholders,
severally and not jointly, agrees to sell to the respective
Underwriters and each of the Underwriters, severally and not
jointly, agrees to purchase from each Selling Stockholder the
respective number of Firm Shares (subject to such adjustment as
you may determine to avoid fractional shares) which bears the
same proportion to the number of Firm Shares to be sold by such
Selling Stockholders as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule A annexed
hereto bears to the total number of Firm Shares to be sold by
the Selling Stockholders, at a purchase price of $[ ] per
Share. You shall release the Firm Shares for public sale
promptly after this Agreement becomes effective. You may from
time to time increase or decrease the public offering price
after the initial public offering to such extent as you may
determine.
In addition, the Company hereby grants to the several
Underwriters the option to purchase, and upon the basis of the
warranties and representations and the other terms and
conditions herein set forth, the Underwriters shall have the
right to purchase, severally and not jointly, from the Company
ratably in accordance with the number of Firm Shares to be
purchased by each of them (subject to such adjustment as you
shall determine to avoid fractional shares), all or a portion
of the Additional Shares as may be necessary to cover over-
allotments made in connection with the offering of the Firm
Shares, at the
<PAGE>
-3-
same purchase price per share to be paid by the Underwriters to
the Selling Stockholders for the Firm Shares. This option may be
exercised at any time (but not more than once) on or before the
thirtieth day following the date hereof, by written notice to the
Company. Such notice shall set forth the aggregate number of
Additional Shares as to which the option is being exercised, and
the date and time when the Additional Shares are to be delivered
(such date and time being herein referred to as the "additional
time of purchase"); provided, however, that the additional time
-------- -------
of purchase shall not be earlier than the time of purchase (as
defined below) nor earlier than the second business day1 after
the date on which the option shall have been exercised nor later
than the eighth business day after the date on which the option
shall have been exercised. The number of Additional Shares to be
sold to each Underwriter shall be the number which bears the same
proportion to the aggregate number of Additional Shares being
purchased as the number of Firm Shares set forth opposite the
name of such Underwriter on Schedule A hereto bears to the total
number of Firm Shares (subject, in each case, to such adjustment
as you may determine to eliminate fractional shares).
[Pursuant to powers of attorney, which shall be
satisfactory to counsel for the Underwriters, granted by each
Selling Stockholder, Kevin F. Clancy will act as
representatives of Heerema Holding Construction, Inc. and
[ ] will act as representatives of [ ]. The
foregoing representatives (the "Representatives of the Selling
Stockholders") are authorized, on behalf of each Selling
Stockholder, to execute any documents necessary or desirable in
connection with the sale of the Shares to be sold hereunder by
each Selling Stockholder, to make delivery of the certificates
of such Shares, to receive the proceeds of the sale of such
Shares, to give receipts for such proceeds, to pay therefrom
the expenses to be borne by each Selling Stockholder in
connection with the sale and public offering of the Shares, to
distribute the balance of such proceeds to each Selling
Stockholder in proportion to the number of Shares sold by each
Selling Stockholder, to receive notices on behalf of each
Selling Stockholder and to take such other action as may be
necessary or desirable in connection with the transactions
contemplated by this Agreement.]
- -------------------------
1 As used herein "business day" shall mean a day on which
the New York Stock Exchange is open for trading.
<PAGE>
-4-
(b) Independent Underwriter. The Company hereby
-----------------------
confirms its engagement of Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") as, and Merrill Lynch
hereby confirms its agreement with the Company to render
services as a "qualified independent underwriter" within the
meaning of Rule 2720(b)(15) of the Conduct Rules of the
National Association of Securities Dealers, Inc. ("NASD") with
respect to the offering and sale of the Shares. Merrill Lynch,
solely in its capacity as qualified independent underwriter and
not otherwise, is referred to herein as the "QIU."
2. Payment and Delivery. Payment of the purchase
--------------------
price for the Firm Shares shall be made to each of the Selling
Stockholders by Federal (same day) funds, against delivery of
the certificates for the Firm Shares to you at the offices of
Dillon, Read & Co. Inc. ("Dillon Read") in New York City, for
the respective accounts of the Underwriters. Such payment and
delivery shall be made at 10:00 A.M., New York City time, on
, 1996 (unless another time shall be agreed to by you
and the Representatives of the Selling Stockholders or unless
postponed in accordance with the provisions of Section 10
hereof). The time at which such payment and delivery are
actually made is hereinafter sometimes called the "time of
purchase". Certificates for the Firm Shares shall be delivered
to you in definitive form in such names and in such
denominations as you shall specify on the second business day
preceding the time of purchase. For the purpose of expediting
the checking of the certificates for the Firm Shares by you,
the Selling Stockholders agree to make such certificates
available to you for such purpose at least one full business
day preceding the time of purchase.
Payment of the purchase price for the Additional
Shares shall be made at the additional time of purchase in the
same manner and at the same office as the payment for the Firm
Shares. Certificates for the Additional Shares shall be
delivered to you in definitive form in such names and in such
denominations as you shall specify on the second business day
preceding the additional time of purchase. For the purpose of
expediting the checking of the certificates for the Additional
Shares by you, the Company agrees to make such certificates
available to you for such purpose at least one full business
day preceding the additional time of purchase.
3. Representations and Warranties of the Company.
---------------------------------------------
The Company represents and warrants to each of the Underwriters
that:
<PAGE>
-5-
(a) the Registration Statement has been declared
effective by the Commission and the Registration Statement
and the Prospectus fully comply in all material respects
with the provisions of the Act, and the Registration
Statement does not contain an untrue statement of a
material fact or omit to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading, and the Prospectus does not
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
provided, however, that the Company makes no warranty or
-------- -------
representation with respect to any statement contained in
the Registration Statement or the Prospectus in reliance
upon and in conformity with information concerning the
Underwriters and furnished in writing by or on behalf of
any Underwriter through you to the Company expressly for
use in the Registration Statement or the Prospectus;
(b) the Company has an authorized capitalization as
set forth in the Registration Statement and the Prospectus
and, as of the time of purchase and the additional time of
purchase, as the case may be, the Company shall have an
authorized capitalization as set forth in the Registration
Statement and the Prospectus; all of the issued and
outstanding shares of capital stock including Common Stock
of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable; the Company
has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
Republic of Panama, with full power and authority to own
its properties and conduct its business as described in
the Registration Statement and the Prospectus, to execute
and deliver this Agreement and to issue and sell the
Additional Shares as herein contemplated;
(c) the Company and each of its subsidiaries (the
"Subsidiaries") are duly qualified or licensed by and are
in good standing in each jurisdiction in which they
conduct their respective businesses and in which the
failure to be so licensed or qualified, individually or in
the aggregate, could have a material adverse effect on the
operations, business or condition of the Company and the
Subsidiaries taken as a whole (a "Material Adverse
Effect"); and the Company and each of its Subsidiaries are
in compliance in all material respects with the laws,
<PAGE>
-6-
orders, rules, regulations and directives issued or
administered by such jurisdictions and in which the
failure to be so in compliance could have a Material
Adverse Effect;
(d) neither the Company nor any of the Subsidiaries
is in breach of, or in default under (nor has any event
occurred which with notice, lapse of time, or both would
constitute a breach of, or default under), its respective
charter or by-laws or in the performance or observance of
any obligation, agreement, covenant or condition contained
in any indenture, mortgage, deed of trust, bank loan or
credit agreement or other agreement or instrument to which
the Company or any of the Subsidiaries is a party or by
which any of them is bound and which could have a Material
Adverse Effect, and the execution, delivery and
performance of this Agreement and the consummation of the
transactions contemplated hereby will not conflict with,
or result in any breach of or constitute a default under
(nor constitute any event which with notice, lapse of
time, or both would constitute a breach of, or default
under), any provisions of the charter or by-laws of the
Company or any of the Subsidiaries or under any provision
of any license, indenture, mortgage, deed of trust, bank
loan or credit agreement or other agreement or instrument
to which the Company or any of the Subsidiaries is a party
or by which any of them or their respective properties may
be bound or affected, or under any federal, state, local
or foreign law, regulation or rule or any decree, judgment
or order applicable to the Company or any of the
Subsidiaries;
(e) this Agreement has been duly authorized,
executed and delivered by the Company and is a legal,
valid and binding agreement of the Company enforceable in
accordance with its terms, except as rights to indemnity
and contribution hereunder may be limited by securities
laws and except as the enforceability hereof may be
limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights
generally and general principles of equity;
(f) the capital stock of the Company, including the
Shares, conforms in all material respects to the
description thereof contained in the Registration
Statement and Prospectus and the certificates for the
Shares are in due and proper form and the holders of the
Shares will not be subject to personal liability by reason
of being such holders;
<PAGE>
-7-
(g) no approval, authorization, consent or order of
or filing with any national, state or local governmental
or regulatory commission, board, body, authority or agency
is required in connection with the issuance and sale of
the Shares as contemplated hereby other than registration
of the Shares under the Act and the U.S. Securities
Exchange Act of 1934, as amended, and the rules and
regulations thereunder (the "Exchange Act")and any
necessary qualification under the securities or blue sky
laws of the various jurisdictions in which the Shares are
being offered by the Underwriters;
(h) no person has the right, contractual or
otherwise, to cause the Company to issue to it, or
register pursuant to the Act, any shares of capital stock
of the Company upon the issue and sale of the Shares to
the Underwriters hereunder, nor does any person have
preemptive rights, rights of first refusal or other rights
to purchase any of the Shares, other than such rights as
have been waived prior to the sale of Shares pursuant to
this Agreement;
(i) KPMG Peat Marwick, whose reports on the
consolidated financial statements of the Company and the
Subsidiaries are filed with the Commission as part of the
Registration Statement and Prospectus, are independent
public accountants as required by the Act and the
applicable published rules and regulations thereunder;
(j) each of the Company and the Subsidiaries has all
necessary licenses, authorizations, consents and approvals
and has made all necessary filings required under any
national, state or local law, regulation or rule, and has
obtained all necessary authorizations, consents and
approvals from other persons, in order to conduct its
respective business, except where the absence of any such
license, authorization, consent, approval or filing could
not have a Material Adverse Effect; neither the Company
nor any of the Subsidiaries is in violation of, or in
default under (nor has any event occurred which with
notice, lapse of time, or both would constitute a
violation of or a default under), any such license,
authorization, consent or approval or any national, state
or local law, regulation or rule or any decree, order or
judgment applicable to the Company or any of the
Subsidiaries the effect of which could have a Material
Adverse Effect;
<PAGE>
-8-
(k) all legal or governmental proceedings, contracts
or documents of a character required to be described in
the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement have
been so described or filed as required;
(l) except as described in the Registration
Statement, there are no actions, suits or proceedings
pending or threatened against the Company or any of the
Subsidiaries or any of their respective properties, at law
or in equity, or before or by any national, state or local
governmental or regulatory commission, board, body,
authority or agency which could result in a judgment,
decree or order having a Material Adverse Effect;
(m) the audited financial statements included in the
Registration Statement and the Prospectus present fairly
the consolidated financial position of the Company and the
Subsidiaries as of the dates indicated and the
consolidated results of operations and changes in
cash flows of the Company and the Subsidiaries for
the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting
principles applied on a consistent basis during the
periods involved;
(n) neither the Company nor the Subsidiaries, nor
any director, officer, agent, employee, or other person
acting, with actual or apparent authority, on behalf of
the Company or the Subsidiaries has, at any relevant time,
directly or indirectly: (i) knowingly, unlawfully and
corruptly made contributions, gifts, expenditures for
entertainment, or other unlawful expenditures relating to
political activity for the purpose of obtaining or
retaining business; (ii) knowingly, unlawfully and
corruptly made payments to government officials or
employees or to political parties or campaigns for the
purpose of obtaining or retaining business; (iii) violated
any applicable provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended (the "FCPA");
(iv) violated any applicable provision of U.S. "fraud and
abuse legislation" or U.S. "anti-kickback law"; or
(v) made any other material payment in the nature of a
bribe, rebate, kickback, payoff or influence payment which
was unlawful under applicable law at the relevant time;
(o) the Company's internal accounting controls and
procedures are sufficient to provide reasonable assurance
<PAGE>
-9-
that the Company's transactions are executed and recorded
in accordance with the requirements of the FCPA;
(p) subsequent to the respective dates as of which
information is given in the Registration Statement and
Prospectus, and except as may be otherwise stated in the
Registration Statement or Prospectus, there has not been
(i) any material adverse change, financial or otherwise,
in the business, properties, prospects, regulatory
environment, results of operations or condition (financial
or otherwise), present or prospective, of the Company and
the Subsidiaries taken as a whole, (ii) any transaction,
which is material to the Company and the Subsidiaries
taken as a whole, contemplated or entered into by the
Company or any of the Subsidiaries or (iii) any
obligation, contingent or otherwise, directly or
indirectly incurred by the Company or any of the
Subsidiaries which is material to the Company and the
Subsidiaries taken as a whole;
(q) the Company has obtained the agreement of each
of the stockholders of the Company not to sell, contract
to sell, grant any option to sell or otherwise dispose of,
directly or indirectly, any shares of Common Stock or
securities convertible into or exchangeable or exercisable
for shares of Common Stock or warrants or other rights to
purchase Common Stock for a period of 180 days after the
date of the Prospectus without the prior written consent
of Dillon Read;
(r) the Company is not an "enemy" or an "ally of the
enemy" within the meaning of Section 2 of the U.S. Trading
with the Enemy Act, as amended; and the Company is not in
violation of, and the Company's use of the proceeds from
the sale of the Additional Shares as contemplated hereby
will not violate, the U.S. Trading with the Enemy Act, as
amended, or any executive orders, proclamations or
regulations issued pursuant thereto, including, without
limitation, regulations administered by the Office of
Foreign Assets Control of the U.S. Department of the
Treasury (31 C.F.R., Subtitle B, Chapter V as amended);
(s) neither the Company nor any of its affiliates
does business with the government of Cuba or with any
person or affiliate located in Cuba within the meaning of
Section 517.075 of the Florida Statutes; and
<PAGE>
-10-
(t) the Company is not treated as a "controlled
foreign corporation" for U.S. federal income tax purposes
under Section 957 of the U.S. Internal Revenue Code of
1986, as amended (the "Code").
4. Representations and Warranties of the Selling
---------------------------------------------
Stockholders. Each Selling Stockholder, severally and not
- ------------
jointly, represents and warrants to each Underwriter that:
(a) such Selling Stockholder now is, and at the time
of delivery of such Shares will be, the lawful owner of
the number of Shares to be sold by such Selling
Stockholder pursuant to this Agreement and has, and at the
time of delivery thereof will have, valid and marketable
title to such Shares, and upon delivery of and payment for
such Shares, purchased in good faith and without notice of
any adverse claims, the Underwriters will acquire valid
and marketable title to such Shares free and clear of any
claim, lien, encumbrance, security interest, community
property right, restriction on transfer or other defect in
title;
(b) such Selling Stockholder has, and at the time of
delivery of such Shares will have, full legal right, power
and capacity, and any approval required by law (other than
those imposed by the Act and the securities or blue sky
laws of various jurisdictions in which the Shares are
being offered by the Underwriters), to sell, assign,
transfer and deliver such Shares in the manner provided in
this Agreement;
(c) this Agreement has been duly executed and
delivered by such Selling Stockholder and is a legal,
valid and binding agreement of such Selling Stockholder
enforceable in accordance with its terms, except as rights
to indemnity and contribution hereunder may be limited by
securities laws and except as the enforceability hereof
may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights
generally and general principles of equity;
(d) when the Registration Statement becomes
effective and at all times subsequent thereto through the
later of the time of purchase, the additional time of
purchase or the termination of the offering of the Shares,
the Registration Statement and Prospectus, and any
supplements or amendments thereto as they relate to such
Selling
<PAGE>
-11-
Stockholder will not contain an untrue statement
of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under
which they were made, not misleading;
[(e) such Selling Stockholder has duly and
irrevocably authorized one of the Representatives of the
Selling Stockholders, on behalf of such Selling
Stockholder, to execute and deliver this Agreement and any
other document necessary or desirable in connection with
the transactions contemplated thereby and to deliver the
Shares to be sold by such Selling Stockholder and receive
payment therefor pursuant hereto]; and
(f) the sale of such Selling Stockholder's Shares
pursuant to this Agreement is not prompted by any
information concerning the Company which is not set forth
in the Prospectus.
5. Certain Covenants of the Company. The Company
--------------------------------
hereby agrees:
(a) to furnish such information as may be required
and otherwise to cooperate in qualifying the Shares for
offering and sale under the securities or blue sky laws of
such jurisdictions as you may designate and to maintain
such qualifications in effect so long as required for the
distribution of the Shares, provided that the Company
shall not be required to qualify as a foreign corporation
or to consent to the service of process under the laws of
any such jurisdiction (except service of process with
respect to the offering and sale of the Shares); and to
promptly advise you of the receipt by the Company of any
notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction
or the initiation or threatening of any proceeding for
such purpose;
(b) to make available to you in New York City, as
soon as practicable after the Registration Statement
becomes effective, and thereafter from time to time to
furnish to the Underwriters, as many copies of the
Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments
or supplements thereto after the effective date of the
Registration
<PAGE>
-12-
Statement) as the Underwriters may request for the purposes
contemplated by the Act;
(c) to advise you promptly and (if requested by you)
to confirm such advice in writing, (i) when the
Registration Statement has become effective and when any
post-effective amendment thereto becomes effective and
(ii) if Rule 430A under the Act is used, when the
Prospectus is filed with the Commission pursuant to Rule
424(b) under the Act (which the Company agrees to file in
a timely manner under such Rules);
(d) to advise you promptly, confirming such advice
in writing, of any request by the Commission for
amendments or supplements to the Registration Statement or
Prospectus or for additional information with respect
thereto, or of notice of institution of proceedings for,
or the entry of a stop order suspending the effectiveness
of the Registration Statement and, if the Commission
should enter a stop order suspending the effectiveness of
the Registration Statement, to make every reasonable
effort to obtain the lifting or removal of such order as
soon as possible; and to advise you promptly of any
proposal to amend or supplement the Registration Statement
or Prospectus and to file no such amendment or supplement
to which you shall object in writing;
(e) to furnish to you and, upon request, to each of
the other Underwriters for a period of five years from the
date of this Agreement (i) copies of any reports or other
communications which the Company shall send to its
stockholders or shall from time to time publish or
publicly disseminate, (ii) copies of all annual, quarterly
and current reports filed with the Commission on Forms 10-
K, 10-Q and 8-K, or such other similar form as may be
designated by the Commission, and (iii) such other
information as you may reasonably request regarding the
Company or its Subsidiaries;
(f) to advise the Underwriters promptly of the hap-
pening of any event known to the Company within the time
during which a prospectus relating to the Shares is
required to be delivered under the Act which, in the
judgment of the Company, would require the making of any
change in the Prospectus then being used so that the
Prospectus would not include an untrue statement of
material fact or omit to state a material fact necessary
to make
<PAGE>
-13-
the statements therein, in the light of the circumstances
under which they are made, not misleading, and, during such
time, to prepare and furnish, at the Company's expense, to
the Underwriters promptly such amendments or supplements to
such Prospectus as may be necessary to reflect any such
change and to furnish you a copy of such proposed amendment
or supplement before filing any such amendment or
supplement with the Commission;
(g) to make generally available to its security
holders, and to deliver to you, an earnings statement of
the Company (which will satisfy the provisions of Section
11(a) of the Act) covering a period of twelve months
beginning after the effective date of the Registration
Statement as soon as is reasonably practicable after the
termination of such twelve-month period, but not later
than , 1997;
(h) to furnish to you three (3) signed copies of the
Registration Statement, as initially filed with the
Commission, and of all amendments thereto (including all
exhibits thereto) and sufficient conformed copies of the
foregoing (other than exhibits) for distribution of a copy
to each of the other Underwriters;
(i) to furnish to you as early as practicable prior
to the time of purchase and the additional time of
purchase, as the case may be, but not later than two
business days, in each case, prior thereto, a copy of the
latest available unaudited interim consolidated financial
statements, if any, of the Company and its Subsidiaries
which have been read by the Company's independent
certified public accountants, as stated in their letter to
be furnished pursuant to Section 8(f) of this Agreement;
(j) to use the net proceeds to the Company from the
sale of the Additional Shares, if the Underwriters
exercise their over-allotment option, in the manner set
forth under the caption "Use of Proceeds" in the
Prospectus;
(k) to furnish to you, before filing with the
Commission subsequent to the effective date of the
Registration Statement and during the period referred to
in paragraph (f) above, a copy of any document proposed to
be filed pursuant to Section 13, 14 or 15(d) of the
Exchange Act;
<PAGE>
-14-
(l) not to sell, contract to sell, grant any option
to sell or otherwise dispose of, directly or indirectly,
any shares of Common Stock or securities convertible into
or exchangeable or exercisable for shares of Common Stock
or warrants or other rights to purchase shares of Common
Stock or permit the registration under the Act of any
shares of Common Stock for a period of 180 days after the
date hereof, without the prior written consent of Dillon
Read, except for: (i) the registration of the Shares and
the sales to the Underwriters pursuant to this Agreement;
and (ii) grants of options or issuances of Common Stock
upon the exercise of outstanding options pursuant to any
of the Company's stock option plans existing as of the
date hereof; and
(m) to use its best efforts to cause the Common
Stock to be listed on the New York Stock Exchange.
6. Certain Covenants of the Company and the Selling
------------------------------------------------
Stockholders. The Company and each of the Selling
- ------------
Stockholders, severally and not jointly, agree with each
Underwriter as follows:
(a) The Company agrees that, whether or not the
transactions contemplated hereby are consummated or this
Agreement is terminated, the Company will pay all
expenses, fees and taxes (other than (x) any transfer
taxes and fees and disbursements of counsel for the
Underwriters except as set forth under Section 7 hereof or
clauses (iii) or (iv) of this Section 6(a) and (y) fees
payable by the Selling Stockholders pursuant to clause (b)
hereof) in connection with (i) the preparation and filing
of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and any amendments or
supplements thereto, and the printing and furnishing of
copies of each thereof to the Underwriters and to dealers
(including costs of mailing and shipment), (ii) the
issuance, sale and delivery of the Shares by the Company
and the Selling Stockholders, (iii) the word processing
and/or printing of this Agreement, any Agreement Among
Underwriters, any dealer agreements, any Statements of
Information, the Custody Agreement and the Powers of
Attorney and the reproduction and/or printing and
furnishing of copies of each thereof to the Underwriters
and to dealers (including costs of mailing and shipment),
(iv) the qualification of the Shares for offering and sale
under state laws and the determination of their
eligibility for investment under
<PAGE>
-15-
state law as aforesaid (including the legal fees and filing
fees and other disbursements of counsel to the
Underwriters) and the word processing and/or printing and
furnishing of copies of any blue sky surveys or legal
investment surveys to the Underwriters and to dealers, (v)
any listing of the Shares on the New York Stock Exchange
and any registration thereof under the Exchange Act, (vi)
the filing for review of the public offering of the Shares
by the NASD, and (vii) the performance of the Company's and
the Selling Stockholders' other obligations hereunder.
(b) The Selling Stockholders, in such proportions
(aggregating 100%) as the number of Firm Shares to be sold
by each Selling Stockholder bears to the total number of
Firm Shares or as they otherwise may determine among
themselves, will pay all underwriting discounts and
commissions, and each Selling Stockholder will pay all
transfer taxes and all fees and disbursements of any
counsel or accountant retained by such Selling
Stockholder, in connection with the sale of the Firm
Shares.
(c) The Company and the Selling Stockholders will
not issue, sell, grant any option to sell or otherwise
dispose of, directly or indirectly, any shares of Common
Stock or securities convertible into or exchangeable for
shares of Common Stock or warrants or other rights to
purchase Common Stock or, in the case of the Company,
permit the registration under the Act of any shares of
Common Stock, for a period of 180 days after the date of
the Prospectus, without the prior written consent of
Dillon Read, except for the registration of the Shares and
the sales to the Underwriters pursuant to this Agreement
and, with respect to the Company, the grant of options or
issuance of shares of common stock upon the exercise of
outstanding options pursuant to any of the Company's stock
plans existing as of the date hereof or the issuance of
shares of common stock upon the exercise of such options.
7. Reimbursement of Underwriters' Expenses. If the
---------------------------------------
Shares are not delivered for any reason other than the
termination of this Agreement pursuant to the second paragraph
of Section 9 hereof or the default by one or more of the
Underwriters in its or their respective obligations hereunder,
the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the fees and disbursements of
their counsel.
<PAGE>
-16-
8. Conditions of Underwriters' Obligations. The
---------------------------------------
several obligations of the Underwriters hereunder are subject
to the accuracy of the representations and warranties on the
part of the Company and the Selling Stockholders on the date
hereof and at the time of purchase (and the several obligations
of the Underwriters at the additional time of purchase are
subject to the accuracy of the representations and warranties
on the part of the Company on the date hereof and at the time
of purchase (unless previously waived) and at the additional
time of purchase, as the case may be), the performance by the
Company and the Selling Stockholders of their obligations
hereunder and to the following conditions:
(a) The Company shall furnish to you at the time of
purchase and at the additional time of purchase, as the
case may be, an opinion of Conner & Winters, A
Professional Corporation, counsel for the Company,
addressed to the Underwriters, and dated the time of
purchase or the additional time of purchase, as the case
may be, with reproduced copies for each of the other
Underwriters and in form satisfactory to Cahill Gordon &
Reindel, counsel for the Underwriters, stating that:
(i) the capital stock of the Company, including
the Shares, conforms in all material respects to the
description thereof contained in the Registration
Statement and Prospectus;
(ii) the Registration Statement and the
Prospectus (except as to the financial statements and
schedules and other financial and statistical data
contained or incorporated by reference therein, as to
which such counsel need express no opinion) comply as
to form in all material respects with the
requirements of the Act;
(iii) the Registration Statement has become
effective under the Act, the Form 8-A is effective
under the Exchange Act, and to such counsel's
knowledge, no stop order proceedings with respect
thereto are pending or threatened under the Act;
(iv) no approval, authorization, consent or
order of or filing with any national, state or local
governmental or regulatory commission, board, body,
authority or agency is required in connection with
the issuance and sale of the Shares as contemplated
<PAGE>
-17-
hereby other than registration of the Shares under
the Act (except such counsel need express no opinion
as to any necessary qualification under the state
securities or blue sky laws of the various
jurisdictions in which the Shares are being offered
by the Underwriters);
(v) the execution, delivery and performance of
this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby
do not and will not conflict with, or result in any
breach of, or constitute a default under (nor
constitute any event which with notice, lapse of
time, or both, would constitute a breach of or
default under), any provisions of the charter or by-
laws of the Company or, to such counsel's knowledge,
any of the Subsidiaries or under any provision of any
material license, indenture, mortgage, deed of trust,
bank loan, credit agreement or other agreement or
instrument known to such counsel to which the Company
or any of its Subsidiaries is a party or by which any
of them or their respective properties may be bound
or affected, or under any law, regulation or rule or
any decree, judgment or order known to such counsel
that is applicable to the Company or any of the
Subsidiaries;
(vi) to such counsel's knowledge, neither the
Company nor any of the Subsidiaries is in breach of,
or in default under (nor has any event occurred which
with notice, lapse of time, or both would constitute
a breach of, or default under), any license,
indenture, mortgage, deed of trust, bank loan or any
other agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which any of
them or their respective properties may be bound or
affected or under any law, regulation or rule or any
decree, judgment or order applicable to the Company
or any of its Subsidiaries;
(vii) to such counsel's knowledge, there are no
contracts, licenses, agreements, leases or documents
of a character which are required to be filed as
exhibits to the Registration Statement or to be
summarized or described in the Prospectus which have
not been so filed, summarized or described;
<PAGE>
-18-
(viii) to such counsel's knowledge, there are no
actions, suits or proceedings pending or threatened
against the Company or any of the Subsidiaries or any
of their respective properties, at law or in equity
or before or by any commission, board, body,
authority or agency which are required to be
described in the Prospectus but are not so described;
(ix) the Shares comply with the listing
requirements of the New York Stock Exchange and have
been approved for listing with the New York Stock
Exchange subject, with respect to the Additional
Shares, only to notice of issuance at or prior to the
additional time of purchase;
(x) the Company is not an "investment company"
within the meaning of the U.S. Investment Company Act
of 1940, as amended, nor is the Company a holding
company or a subsidiary of a holding company under
the U.S. Public Utility Holding Company Act of 1935;
and
(xi) each issuance of securities referred to in
Item 15 of the Registration Statement (i) was
effected in reliance upon a valid exemption from the
registration requirements of the Act and (ii) was
effected in compliance with the securities or blue
sky laws of each jurisdiction in which such
securities were offered and sold.
Such counsel shall be entitled to rely on
certificates of public officials, the Selling Stockholders
and officers of the Company with respect to certain
factual matters upon which its opinion may be based.
Such counsel may state that the expression "to such
counsel's knowledge" means that after considering the
actual knowledge of those attorneys in such counsel's firm
who have given substantive attention to the Selling
Stockholder's affairs, such counsel finds no reason to
believe that the opinions expressed therein are factually
incorrect.
In addition, such counsel shall state that such
counsel have participated in conferences with officers and
other representatives of the Company, representatives of
the independent public accountants of the Company and
<PAGE>
-19-
representatives of the Underwriters at which the contents
of the Registration Statement and Prospectus were
discussed and, although such counsel is not passing upon
and does not assume responsibility for the accuracy,
completeness or fairness of the statements contained in
the Registration Statement or Prospectus (except as and to
the extent stated in subparagraph (i) above), on the basis
of the foregoing (relying as to materiality to a large
extent upon the opinions of officers and other
representatives of the Company) nothing has come to the
attention of such counsel that leads them to believe that
the Registration Statement or any amendment thereto at the
time such Registration Statement or amendment became
effective contained an untrue statement of a material fact
or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, or that the Prospectus or any supplement
thereto at the date of such Prospectus or such supplement,
and at all times up to and including the time of purchase
or additional time of purchase, as the case may be,
contained an untrue statement of a material fact or
omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading (it being understood that such counsel need not
express any comment with respect to the financial
statements and schedules and other financial and
statistical data found in or derivable from the financial
or internal records of the Company and the Subsidiaries
included in the Registration Statement or Prospectus).
In rendering such opinions, such counsel may rely, as
to matters governed by the laws of jurisdictions other
than the United States, upon the opinions of foreign
counsel to the Company and the Subsidiaries, which counsel
shall be reasonably acceptable to the Underwriters.
(b) The Selling Stockholders shall furnish to you at
the time of purchase an opinion or opinions of their
respective counsel, addressed to the Underwriters, and
dated the time of purchase, with reproduced copies for
each of the other Underwriters, and in form and substance
satisfactory to Cahill Gordon & Reindel, counsel for the
Underwriters, stating that:
<PAGE>
-20-
(i) this Agreement has been duly executed and
delivered by or on behalf of each of the Selling
Stockholders;
(ii) each Selling Stockholder has full legal
right and power, and has obtained any authorization
or approval required by law (other than those imposed
by the Act and the securities or blue sky laws of
certain jurisdictions), to sell, assign, transfer and
deliver the Shares to be sold by such Selling
Stockholder in the manner provided in this Agreement;
(iii) assuming the Underwriters are purchasers in
good faith without notice of any adverse claim, upon
payment for and delivery of such Shares in accordance
with this Agreement, the Underwriters will acquire
all of the rights of such Selling Stockholder in such
Shares and will also acquire their interest in such
Shares free of any adverse claim (within the meaning
of Section 8-302 of the Uniform Commercial Code);
[(iv) one of the Representatives of the Selling
Stockholders has been duly authorized by each Selling
Stockholder to execute and deliver on behalf of such
Selling Stockholder this Agreement and any other
document necessary or desirable in connection with
the transactions contemplated hereby and to deliver
the Shares to be sold by such Selling Stockholder;
and]
(v) to such counsel's knowledge, the statements
in the Prospectus under the caption "Principal and
Selling Stockholders" insofar as such statements
constitute a summary of the matters referred to
therein with respect to the Selling Stockholders,
present fairly the information called for with
respect to such matters.
Such counsel may state that the expression "to such
counsel's knowledge" means that after considering the
actual knowledge of those attorneys in such counsel's firm
who have given substantive attention to the Selling
Stockholder's affairs, such counsel finds no reason to
believe that the opinions expressed therein are factually
incorrect.
(c) The Company shall furnish to you at the time of
purchase and at the additional time of purchase, as the
<PAGE>
-21-
case may be, an opinion of Arias, Fabrega & Fabrega,
Panamanian counsel to the Company, addressed to the
Underwriters, and dated the time of purchase or the
additional time of purchase, as the case may be, with
reproduced copies for each of the other Underwriters and
in form satisfactory to Cahill Gordon & Reindel, counsel
for the Underwriters, stating that:
(i) the Company has been duly incorporated and
is validly existing as a corporation in good standing
under the laws of the Republic of Panama, with full
corporate power and authority to own its properties
and conduct its businesses as described in the
Registration Statement and the Prospectus, to execute
and deliver this Agreement and to issue, sell and
deliver the Additional Shares as herein contemplated;
and to such counsel's knowledge, no proceeding has
been instituted by any relevant regulatory authority
in the Republic of Panama for the dissolution or
termination of the corporate existence of the
Company;
(ii) each of the Panama Subsidiaries has been
duly incorporated and is validly existing as a
corporation in good standing under the laws of the
Republic of Panama, with full corporate power and
authority to own its respective properties and
conduct its respective businesses; and, to such
counsel's knowledge, no proceeding has been
instituted by any relevant regulatory authority in
the Republic of Panama for the dissolution or
termination of the corporate existence of any such
Subsidiary;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company;
(iv) the Additional Shares, if and when issued
and delivered to and paid for by the Underwriters,
will be duly and validly authorized and issued and
will be fully paid and non-assessable;
(v) the Company has an authorized
capitalization as set forth in the Registration
Statement and the Prospectus; the outstanding shares
of capital stock of the Company have been duly and
validly authorized and issued, and are fully paid,
nonassessable and free from statutory and contractual
preemptive rights; the Additional Shares when issued,
<PAGE>
-22-
will be free of statutory and contractual preemptive
rights; the certificates for the Shares are in due
and proper form and the holders of the Shares will
not be subject to personal liability by reason of
being such holders;
(vi) to such counsel's knowledge, (A) the
businesses of the Company and the Panama Subsidiaries
has been conducted in all material respects in
compliance with all applicable laws, rules and
regulations of the Republic of Panama; and (B) the
Company is not in violation of or conflict with any
term or provision of its charter or by-laws or other
governing documents and neither the Company nor any
of the Panama Subsidiaries is in violation of any
franchise, license, permit, judgment, decree, order,
statute, rule or regulation of the Republic of Panama
where the consequences of such violation could have a
material adverse effect on the business, financial
condition or results of operations of the Company and
the Subsidiaries, taken as a whole;
(vii) the execution, delivery and performance of
this Agreement by the Company and the consummation of
the transactions contemplated hereby (including,
without limitation, the issuance and sale of the
Additional Shares) will not violate the charter or
by-laws or other governing document of the Company or
any applicable law, rule or administrative regulation
of or in the Republic of Panama, or any decree known
to such counsel of any court or governmental agency
or governmental authority of or in the Republic of
Panama having jurisdiction over the Company or the
Subsidiaries or any of their properties, except for
such violations as would not, individually or in the
aggregate, have a material adverse effect on the
business, financial condition or results of
operations of the Company and the Subsidiaries, taken
as a whole;
(viii) no approval, authorization, consent or
order of or filing, registration or qualification
with any governmental agency or authority of or
within the Republic of Panama is required in
connection with the execution and delivery by the
Company of this Agreement and the consummation of the
transactions contemplated hereby (including, without
<PAGE>
-23-
limitation, the issuance and sale of the Additional
Shares);
(ix) the statements made in the Registration
Statement and the Prospectus, to the extent they
constitute summaries of the terms of the Company's
charter and by-laws (including the terms of the
Company's capital stock) or matters of Panamanian law
(including without limitation the statements
contained in the Registration Statement and the
Prospectus under the captions "Certain Income Tax
Considerations" and "Enforceability of Civil
Liabilities Under the Federal Securities Laws"), are
fair summaries of such documents and laws and are
accurate in all material respects;
(x) the certificates for the Shares to be sold
by the Company and the Selling Stockholders are in
due and proper form under Panamanian law;
(xi) no stamp or other issuance or transfer
taxes or duties and no capital gains, income,
withholding or other taxes are payable by or on
behalf of the Underwriters to the Republic of Panama
or to any political subdivision or taxing authority
thereof or therein in connection with the purchase by
the Underwriters of the Shares or the resale thereof
as contemplated by the Prospectus; and all dividends
and other distributions paid on or in respect of the
Shares to all persons whether residents or non-
residents of the Republic of Panama will not be
subject to Panamanian income, withholding or other
taxes;
(xii) under the laws of the Republic of Panama,
the submission by the Company to the jurisdiction of
any federal or state court sitting in the County of
New York, State of New York, U.S.A., the appointment
by the Company of CT Corporation System as its agent
to receive service of process in the United States
and the designation of the law of the State of New
York, U.S.A., to apply to this Agreement are binding
upon the Company and, if properly brought to the
attention of the court in accordance with the laws of
the Republic of Panama, would be enforceable in any
judicial proceeding in the Republic of Panama;
<PAGE>
-24-
(xiii) the indemnification and contribution
provisions set forth in Section 11 of this Agreement
do not contravene Panamanian law or public policy;
(xiv) the courts of the Republic of Panama will
observe and give effect to the choice of New York law
as the governing law of this Agreement;
(xv) the courts of the Republic of Panama should
recognize and enforce a final judgment of a U.S.
federal or state court of competent jurisdiction
sitting in the County of New York in respect of any
amount payable by the Company under this Agreement or
arising out of or based upon the offering of Shares
contemplated by this Agreement, provided that such
judgment conforms with the requirements of the laws
of the Republic of Panama for the enforcement of
foreign judgments, which require that (A) such
judgment be in respect of an action in personam, (B)
-- --------
notice of the action shall have been served
personally on the defendant or its agent within the
jurisdiction of the court, (C) the obligation in
respect of which the judgment is given be lawful in
the Republic of Panama, (D) the copy of the judgment
to be enforced in the Republic of Panama shall have
been authenticated by a consular officer of the
Republic of Panama, (E) the judgment being enforced
not be contrary to the public policy of the Republic
of Panama, and (F) the court, the enforcement of the
judgment of which is being sought, grant reciprocity
to the enforcement of judgments of courts of the
Republic of Panama;
(xvi) assuming that the signatures of the parties
are authenticated by a notary public and the notary's
signature is acknowledged with the apostille of the
Hague Convention, and assuming that stamp taxes of
U.S.$1.00 for each U.S.$1,000 of the purchase price
are paid prior to filing this Agreement in evidence
before a Panama court, and assuming that the same is
translated into the Spanish language by a certified
translator, this Agreement is in proper legal form
for enforcement against the Company in the Republic
of Panama and any Underwriter would be entitled to
sue as plaintiff in the courts of the Republic of
Panama for the enforcement of its respective rights
against the Company pursuant to or arising under this
Agreement, and such access will not be subject to any
<PAGE>
-25-
conditions which are not applicable to Panamanian
persons; and
(xvii) neither the Company nor any of its assets
is entitled to immunity from suit, execution,
attachment or other legal process in the Republic of
Panama by reason of sovereign immunity or otherwise.
Such counsel shall be entitled to rely on
certificates of public officials, the Selling Stockholders
and officers of the Company with respect to certain
factual matters upon which its opinion may be based.
Such counsel may state that the expression "to such
counsel's knowledge" means that after considering the
actual knowledge of those attorneys in such counsel's firm
who have given substantive attention to the Selling
Stockholder's affairs, such counsel finds no reason to
believe that the opinions expressed therein are factually
incorrect.
(d) the Company shall furnish to you at the time of
purchase and at the additional time of purchase, as the
case may be, an opinion of Hall, Estill, Hardwick, Gable,
Golden & Nelson, P.C., special United States tax counsel
to the Company, addressed to the Company, which states
that such opinion may be relied upon by the Underwriters,
and each dated the time of purchase or the additional time
of purchase, as the case may be, with reproduced copies
for each of the other Underwriters and in form
satisfactory to Cahill Gordon & Reindel, counsel for the
Underwriters, stating that, based on the limitations and
qualifications set forth therein, the Company will not be
treated as a controlled foreign corporation for federal
income tax purposes under Section 957 of the Code.
(e) the Company shall furnish to you at the time of
purchase opinions of other counsel, addressed to the
Underwriters, and dated the time of purchase, with
reproduced copies for each of the other Underwriters and
in form satisfactory to Cahill Gordon & Reindel, counsel
for the Underwriters, stating that:
(i) each of the Designated Subsidiaries listed
on Schedule D hereto (the "Designated Subsidiaries")
has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its
<PAGE>
-26-
respective jurisdiction of incorporation with full
corporate power and authority to own its respective
properties and to conduct its respective business as
presently owned and conducted;
(ii) the consummation by the Company of an
initial public offering of its common stock and the
execution, delivery and performance of an
underwriting agreement in connection therewith do not
and will not conflict with, or result in any breach
of the charter, by-laws or, to the knowledge of such
counsel, any material agreements of the Designated
Subsidiary or violate any law, regulation or rule,
or, to such counsel's knowledge, any decree, judgment
or order applicable to such Designated Subsidiary,
except for such violations as could not, individually
or in the aggregate, have a Material Adverse Effect;
(iii) to the knowledge of such counsel, such
Designated Subsidiary is not in violation of any
license, authorization, consent or approval or any
national, state or local law, regulation or rule or
any decree, judgment or order applicable to such
Designated Subsidiary, the effect of which could have
a Material Adverse Effect;
(f) You shall have received from KPMG Peat Marwick
letters dated, respectively, the date of this Agreement
and the time of purchase and additional time of purchase,
as the case may be, and addressed to the Underwriters
(with reproduced copies for each of the Underwriters) in the
forms heretofore approved by the Managing Underwriters.
(g) You shall have received at the time of purchase
and at the additional time of purchase, as the case may
be, the favorable opinion of Cahill Gordon & Reindel,
counsel for the Underwriters, dated the time of purchase
or the additional time of purchase, as the case may be, as
to the matters referred to in subparagraph (iii) of
Section 8(a) above.
In addition, such counsel shall state that such
counsel have participated in conferences with officers and
other representatives of the Company, counsel for the
Company, representatives of the independent public
accountants of the Company and representatives of the
<PAGE>
-27-
Underwriters at which the contents of the Registration
Statement and Prospectus and related matters were
discussed and, although such counsel is not passing upon
and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in
the Registration Statement and Prospectus, on the basis of
the foregoing (relying as to materiality to a large extent
upon the opinions of officers and other representatives of
the Company), no facts have come to the attention of such
counsel which lead them to believe that the Registration
Statement or any amendment thereto at the time such
Registration Statement or amendment became effective
contained an untrue statement of a material fact or
omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Prospectus as of its date or any
supplement thereto as of its date contained an untrue
statement of a material fact or omitted to state a
material fact required to be stated therein or necessary
to make the statements therein, in light of the
circumstances under which they were made, not misleading
(it being understood that such counsel need not express
any comment with respect to the financial statements and
schedules and other financial and statistical data found
in or derivable from the financial or internal records of
the Company and the Subsidiaries included in the
Registration Statement or Prospectus).
In rendering such opinions, such counsel need not
express any opinion with regard to the application of laws
of any jurisdiction other than the federal law of the
United States and the laws of the State of New York.
(h) No amendment or supplement to the Registration
Statement or Prospectus shall be filed prior to the time
the Registration Statement becomes effective to which you
object in writing.
(i) The Registration Statement shall become
effective, or if Rule 430A under the Act is used, the
Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) under the Act, at or before 5:00
P.M., New York City time, on the date of this Agreement,
unless a later time (but not later than 5:00 P.M., New
York City time, on the second full business day after the
date of this Agreement) shall be agreed to by the Company,
the Representatives of the Selling Stockholders and you in
writing or by telephone, confirmed in writing; provided,
--------
<PAGE>
-28-
however, that the Company, the Representatives of the
-------
Selling Stockholders and you and any group of Underwrit-
ers, including you, who have agreed hereunder to purchase
in the aggregate at least 50% of the Firm Shares may, from
time to time, agree on a later date.
(j) Prior to the time of purchase or the additional
time of purchase, as the case may be, (i) no stop order
with respect to the effectiveness of the Registration
Statement shall have been issued under the Act or
proceedings initiated under Section 8(d) or 8(e) of the
Act; (ii) the Registration Statement and all amendments
thereto, or modifications thereof, if any, shall not
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
and (iii) the Prospectus and all amendments or supplements
thereto, or modifications thereof, if any, shall not
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in the light of
the circumstances under which they are made, not
misleading.
(k) Between the time of execution of this Agreement
and the time of purchase or the additional time of
purchase, as the case may be, (i) no material change,
financial or otherwise (other than as referred to in the
Registration Statement and Prospectus), in the business,
condition or prospects of the Company and the Subsidiaries
taken as a whole shall occur or become known and (ii) no
transaction which could reasonably be expected to have a
Material Adverse Effect has been entered into by the
Company or any of its Subsidiaries.
(l) The Company shall, at the time of purchase or
additional time of purchase, as the case may be, deliver
to you a certificate of two of its executive officers,
reasonably satisfactory to you, to the effect that the
representations and warranties of the Company as set forth
in this Agreement are true and correct as of such date and
to the effect that the conditions set forth in
Sections 8(h) and (i) above have been met.
(m) You shall have received signed letters, dated
the date of this Agreement, from each of the stockholders
listed on Schedule C and each of the directors and
officers of the Company to the effect that such persons
shall
<PAGE>
-29-
not sell, contract to sell, grant any option to sell
or otherwise dispose of, directly or indirectly, any
shares of Common Stock of the Company or securities
convertible into or exchangeable for shares of Common
Stock or warrants or other rights to purchase Common Stock
except as permitted hereunder for a period of 180 days
after the date of the Prospectus without the prior written
consent of Dillon Read.
(n) The Company and the Selling Stockholders shall
have furnished to you such other documents and
certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus
as of the time of purchase and the additional time of
purchase, as the case may be, as you may reasonably
request.
(o) The Company and the Selling Stockholders shall
have performed such of their respective obligations under
this Agreement as are to be performed by the terms hereof
at or before the time of purchase and at or before the
additional time of purchase, as the case may be.
(p) The Shares shall have been approved for listing
on the New York Stock Exchange, subject, with respect to
the Additional Shares, only to notice of issuance at or
prior to the additional time of purchase.
(q) The Selling Stockholders shall, at the time of
purchase, deliver to you a certificate of the
Representatives of the Selling Stockholders, reasonably
satisfactory to you, to the effect that the
representations and the warranties of the Selling
Stockholders as set forth in this Agreement have been met
and they are true and correct as of such date.
(r) All corporate proceedings and other legal
matters incident to the authorization, form and validity
of this Agreement, the Shares, and the Prospectus and all
other legal matters relating to this Agreement, the Shares
and the transactions contemplated hereby shall be
satisfactory in all reasonable respects to you.
9. Effective Date of Agreement; Termination. This
----------------------------------------
Agreement shall become effective (i) if Rule 430A under the Act
is not used, when you shall have received notification of the
effectiveness of the Registration Statement, or (ii) if Rule
<PAGE>
-30-
430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder
shall be subject to termination in the absolute discretion of
you or any group of Underwriters (which may include you) which
has agreed to purchase in the aggregate at least 50% of the
Firm Shares, if, at any time prior to the time of purchase or,
with respect to the purchase of any Additional Shares, the
additional time of purchase, as the case may be, trading in
securities on the New York Stock Exchange shall have been
suspended or minimum prices shall have been established on the
New York Stock Exchange, or if a banking moratorium shall have
been declared either by the United States or New York State
authorities, or if the United States shall have declared war in
accordance with its constitutional processes or there shall
have occurred any material outbreak or escalation of
hostilities or other national or international calamity or
crisis of such magnitude in its effect on the financial markets
of the United States as, in your judgment or in the judgment of
such group of Underwriters, to make it impracticable to market
the Shares.
If you or any group of Underwriters elects to
terminate this agreement as provided in this Section 9, the
Company, the Representatives of the Selling Stockholders and
each other Underwriter shall be notified promptly by letter or
telegram.
If the sale to the Underwriters of the Shares, as
contemplated by this Agreement, is not carried out by the
Underwriters for any reason permitted under this Agreement or
if such sale is not carried out because the Company or the
Selling Stockholders, as the case may be, shall be unable to
comply with any of the terms of this Agreement, the Company or
the Selling Stockholders, as the case may be, shall not be
under any obligation or liability under this Agreement (except
to the extent provided in Sections 6(a), 7 and 11 hereof), and
the Underwriters shall be under no obligation or liability to
the Company and the Selling Stockholders under this Agreement
(except to the extent provided in Section 11 hereof) or to one
another hereunder.
10. Increase in Underwriters' Commitments. If any
-------------------------------------
Underwriter shall default in its obligation to take up and pay
for the Firm Shares to be purchased by it hereunder and if the
number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not
exceed 10% of the total number of Firm Shares, the
<PAGE>
-31-
non-defaulting Underwriters shall take up and pay for (in
addition to the aggregate amount of Firm Shares they are
obligated to purchase pursuant to Section 1 hereof) the number of
Firm Shares agreed to be purchased by all such defaulting
Underwriters, as hereinafter provided. Such Shares shall be taken
up and paid for by such non-defaulting Underwriter or
Underwriters in such amount or amounts as you may designate with
the consent of each Underwriter so designated or, in the event no
such designation is made, such Shares shall be taken up and paid
for by all non-defaulting Underwriters pro rata in proportion to
the aggregate number of Firm Shares set opposite the names of
such non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its
obligations hereunder, the Selling Stockholders agree with the
non-defaulting Underwriters that they will not sell any Firm
Shares hereunder unless all of the Firm Shares are purchased by
the Underwriters (or by substituted Underwriters selected by
you with the approval of the Company and the Selling
Stockholders or selected by the Company and the Selling
Stockholders with your approval).
If a new Underwriter or Underwriters are substituted
by the Underwriters or by the Company for a defaulting
Underwriter or Underwriters in accordance with the foregoing
provision, the Company or you shall have the right to postpone
the time of purchase for a period not exceeding five business
days in order that any necessary changes in the Registration
Statement and Prospectus and other documents may be effected.
The term Underwriter as used in this agreement shall
refer to and include any Underwriter substituted under this
Section 10 with like effect as if such substituted Underwriter
had originally been named in Schedule A.
11. Indemnity by the Company, the Selling
-------------------------------------
Stockholders and the Underwriters. (a) The Company and the
- ---------------------------------
Selling Stockholders jointly and severally agree to indemnify,
defend and hold harmless each Underwriter and any person who
controls any Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, from and against any
loss, expense, liability or claim (including the reasonable
cost of investigation) which, jointly or severally, any such
Underwriter or any such controlling person may incur under the
Act, the Exchange Act or otherwise insofar as such loss,
expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact
<PAGE>
-32-
contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by
the Company) or in a Prospectus (the term Prospectus for the
purpose of this Section 11 being deemed to include any
Preliminary Prospectus, the Prospectus and the Prospectus as
amended or supplemented by the Company), or arises out of or is
based upon any omission or alleged omission to state a material
fact required to be stated in either such Registration
Statement or Prospectus or necessary to make the statements
made therein not misleading, except insofar as any such loss,
expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information furnished in
writing by any Underwriter through you to the Company expressly
for use with reference to such Underwriter in such Registration
Statement or such Prospectus or arises out of or is based upon
any omission or alleged omission to state a material fact in
connection with such information required to be stated in
either such Registration Statement or Prospectus or necessary
to make such information not misleading; provided, however,
-------- -------
that the indemnity agreement contained in this Section 11(a)
with respect to any Preliminary Prospectus or amended
Preliminary Prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such
Underwriter) from whom the person asserting any such loss,
expense, liability or claim purchased the Shares which are the
subject thereof if the Prospectus corrected any such alleged
untrue statement or omission and if such Underwriter failed to
send or give a copy of the Prospectus to such person at or
prior to the written confirmation of the sale of such Shares to
such person; provided, further, that no Selling Stockholder
-------- -------
shall be responsible, either pursuant to this indemnity or as a
result of any breach of this Agreement, for losses, expenses,
liability or claims arising out of or based upon such untrue
statement or omission or allegation thereof based upon
information furnished by any party other than such Selling
Stockholder and, in any event, no Selling Stockholder shall be
responsible, either pursuant to this indemnity or as a result
of any breach of this Agreement, for losses, expenses,
liability or claims for an amount in excess of the proceeds to
be received by such Selling Stockholder (before deducting
expenses) from the sale of Shares hereunder.
The Company and the Selling Stockholders, jointly and
severally, also agree to indemnify and hold harmless the QIU
and such person, if any, who controls the QIU within the
meaning of either Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims,
<PAGE>
-33-
damages, liabilities and judgments incurred as a result of the
QIU's participation as a "qualified independent underwriter"
within the meaning of Rule 2720(b)(15) of the NASD Conduct
Rules; provided, however, that the indemnity agreement
-------- -------
contained in this Section 11(a) with respect to any Preliminary
Prospectus or amended Preliminary Prospectus shall not inure to
the benefit of the QIU (or to the benefit of any person
controlling the QIU) from whom the person asserting any such
loss, expense, liability or claim purchased the Shares which
are the subject thereof if the Prospectus corrected any such
alleged untrue statement or omission and if the QIU failed to
send or give a copy of the Prospectus to such person at or
prior to the written confirmation of the sale of such Shares to
such person; provided, further, that no Selling Stockholder
-------- -------
shall be responsible, either pursuant to this indemnity or as a
result of any breach of this Agreement, for losses, expenses,
liability or claims arising out of or based upon such untrue
statement or omission or allegation thereof based upon
information furnished by any party other than such Selling
Stockholder and, in any event, no Selling Stockholder shall be
responsible, either pursuant to this indemnity or as a result
of any breach of this Agreement, for losses, expenses,
liability or claims for an amount in excess of the proceeds to
be received by such Selling Stockholder (before deducting
expenses) from the sale of Shares hereunder.
If any action is brought against an Underwriter or
controlling person in respect of which indemnity may be sought
against the Company or any Selling Stockholder pursuant to the
foregoing paragraphs, such Underwriter shall promptly notify
the Company and the Representatives of the Selling Stockholders
in writing of the institution of such action and the Company or
such Selling Stockholder, as the case may be, shall assume the
defense of such action, including the employment of counsel and
payment of expenses. Such Underwriter or such controlling
person shall have the right to employ its or their own counsel
in any such case, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or of such
controlling person unless the employment of such counsel shall
have been authorized in writing by the Company or such Selling
Stockholder in connection with the defense of such action or
the Company or such Selling Stockholder shall not have employed
counsel to have charge of the defense of such action or such
indemnified party or parties shall have reasonably concluded
that there may be defenses available to it or them which are
different from or additional to those available to the Company
or such Selling Stockholder (in which case the Company or such
<PAGE>
-34-
Selling Stockholder shall not have the right to direct the
defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall
be borne by the Company or such Selling Stockholder, as the
case may be, and paid as incurred (it being understood,
however, that the Company or such Selling Stockholder shall not
be liable for the expenses of more than one separate counsel in
any one action or series of related actions in the same
jurisdiction representing the indemnified parties who are
parties to such action); provided, that, if indemnity is sought
pursuant to the second paragraph of this Section 11(a), then,
in addition to such counsel for the indemnified parties, the
indemnifying party shall be liable for the reasonable fees and
expenses of not more than one separate counsel (in addition to
any necessary local counsel) for the QIU in its capacity as a
"qualified independent underwriter" and all persons, if any,
who control the QIU within the meaning of Section 15 of the Act
or Section 20 of the Securities Exchange Act of 1934 if, in the
reasonable judgment of the QIU there may exist a conflict of
interest between the QIU and the other indemnified parties. In
the case of any such separate counsel for the QIU and such
control persons of the QIU, such counsel shall be designated in
writing by the QIU. Anything in this paragraph (a) to the
contrary notwithstanding, neither the Company nor any of the
Selling Stockholders shall be liable for any settlement of any
such claim or action effected without its written consent
(unless the Company and the Selling Shareholders shall be in
breach of their obligation to pay fees and expenses pursuant to
this Agreement).
(b) Each Underwriter severally agrees to indemnify,
defend and hold harmless the Company, its directors and
officers, each Selling Stockholder and any person who controls
the Company or any Selling Stockholder within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act from
and against any loss, expense, liability or claim (including
the reasonable cost of investigation) which, jointly or
severally, the Company, any Selling Stockholder or any such
person may incur under the Act or otherwise, insofar as such
loss, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a
material fact contained in and in conformity with information
furnished in writing by or on behalf of such Underwriter
through you to the Company expressly for use with reference to
such Underwriter in the Registration Statement (or in the
Registration Statement as amended by any post-effective
amendment thereof by the Company) or in a Prospectus, or arises
out of or is based upon any
<PAGE>
-35-
omission or alleged omission to state a material fact in
connection with such information required to be stated either in
such Registration Statement or Prospectus or necessary to make
such information not misleading.
If any action is brought against the Company, any
Selling Stockholder or any such person in respect of which
indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company, such Selling Stockholder or
such person shall promptly notify such Underwriter in writing
of the institution of such action and such Underwriter shall
assume the defense of such action, including the employment of
counsel and payment of expenses. The Company, such Selling
Stockholder or such person shall have the right to employ its
own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Company, such Selling
Stockholder or such person unless the employment of such
counsel shall have been authorized in writing by such
Underwriter in connection with the defense of such action or
such Underwriter shall not have employed counsel to have charge
of the defense of such action or such indemnified party or
parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or
additional to those available to such Underwriter (in which
case such Underwriter shall not have the right to direct the
defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall
be borne by such Underwriter and paid as incurred (it being
understood, however, that such Underwriter shall not be liable
for the expenses of more than one separate counsel in any one
action or series of related actions in the same jurisdiction
representing the indemnified parties who are parties to such
action). Anything in this paragraph (b) to the contrary
notwithstanding, no Underwriter shall be liable for any
settlement of any such claim or action effected without the
written consent of such Underwriter.
(c) If the indemnification provided for in this
Section 11 is unavailable to an indemnified party under
subsections (a) and (b) of this Section 11 in respect of any
losses, expenses, liabilities or claims referred to therein,
then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of
such losses, expenses, liabilities or claims (i) in such
proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one
hand and the
<PAGE>
-36-
Underwriters on the other hand from the offering of the Shares or
(ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company and the
Selling Stockholders on the one hand and the of Underwriters on
the other in connection with the statements or omissions which
resulted in such losses, expenses, liabilities or claims, as well
as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholders on
the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before
deducting expenses) received by the Company and the Selling
Stockholders bear to the total underwriting discounts and
commissions received by the Underwriters. The Company and the
Underwriters agree that Merrill Lynch will not receive any
additional benefits hereunder for serving as QIU in connection
with the offering and sale of the Shares. The relative fault of
the Company and the Selling Stockholders on the one hand and of
the Underwriters on the other shall be determined by reference
to, among other things, whether the untrue statement or alleged
untrue statement of a material fact or omission or alleged
omission relates to information supplied by the Company, by the
Selling Stockholders or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid
or payable by a party as a result of the losses, expenses,
liabilities and claims referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred
by such party in connection with investigating or defending any
claim or action.
(d) The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 11 were determined by pro
rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations
referred to in subsection (c) above. Notwithstanding the
provisions of this Section 11, no Underwriter shall be required
to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by such
Underwriter and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue
statements or alleged untrue statement or omission or alleged
<PAGE>
-37-
omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriter's
obligations to contribute pursuant to this Section 11 are
several in proportion to their respective underwriting
commitments and not joint.
(e) The indemnity and contribution agreements
contained in this Section 11 and the covenants, warranties and
representations of the Company and the Selling Stockholders
contained in this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of
any Underwriter, or any person who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, or by or on behalf of the Company, its
directors and officers, any Selling Stockholder or any person
who controls the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, and shall survive
any termination of this Agreement or the issuance and delivery
of the Shares. The Company, each Selling Stockholder and each
Underwriter agree promptly to notify the others of the
commencement of any litigation or proceeding against it and, in
the case of the Company, against any of the Company's officers
and directors in connection with the issuance and sale of the
Shares, or in connection with the Registration Statement or
Prospectus.
(f) The Company acknowledges for all purposes under
this Agreement (including, without limitation, this Section 11)
that the statements set forth in (i) the first sentence of the
last paragraph of text on the cover page of the Prospectus
concerning the terms of the offering by the Underwriters, (ii)
the last paragraph on page 2 of the Prospectus concerning
stabilization and overallotment by the Underwriters, (iii) the
fourth paragraph of text under the caption "Underwriting" in
the Prospectus concerning the terms of the offering by the
Underwriters, and (iv) the last paragraph of text under the
caption "Underwriting" in the Prospectus concerning
confirmation of sales to accounts over which the Underwriters
exercise discretionary authority, constitute the only written
information furnished to the Company by or on behalf of the
Underwriters through you or your counsel expressly for use in
the Registration Statement, any Preliminary Prospectus, or the
Prospectus (or any amendment or supplement to any of them) and
that no Underwriter shall be deemed to have provided any
information (and therefore are not responsible for any
statements or
<PAGE>
-38
omissions) pertaining to the any agreement or arrangement with
respect to any party other than such Underwriter.
12. Notices. Except as otherwise herein provided,
-------
all statements, requests, notices and agreements shall be in
writing or by telegram and, (a) if to the Underwriters, shall
be sufficient in all respects if delivered or sent to Dillon,
Read & Co. Inc., 535 Madison Avenue, New York, N.Y. 10022,
U.S.A., Attention: Syndicate Department; (b) if to the
Company, shall be sufficient in all respects if delivered or
sent to the Company at the offices of the Company at Willbros
Group, Inc., Edificio Torre Banco Germanico, Calle 50 y 55
Este, Apartado 850048, Panama 5, Republic of Panama, with a
copy to Willbros USA, Inc., 2431 East 61st Street, Suite 700,
Tulsa, Oklahoma 74136, U.S.A., Attention: President; and
(c) if to any of the Selling Stockholders, shall be sufficient
in all respects if delivered or sent to the Representatives of
the Selling Stockholders at [
].
13. Agent for Service. (a) The Company hereby
-----------------
irrevocably (i) designates and appoints Corporation Trust
System at 1633 Broadway, New York, New York 10019, U.S.A., as
its authorized agent upon which process may be served in any
suit or proceeding arising out of or relating to this Agreement
that may be instituted in any federal or state court in the
State of New York or brought under federal or state securities
laws; (ii) submits to the jurisdiction of any such court in any
such suit or proceeding, and (iii) irrevocably agrees that
service of process upon Corporation Trust System and written
notice of said service to the Company, shall be deemed in every
respect effective service of process upon the Company in any
such suit or proceeding. The Company agrees to take any and
all action, including the execution and filing of any and all
such documents and instruments, as may be necessary to continue
such designation and appointment of Corporation Trust System in
full force and effect; provided, however, that the Company may,
-------- -------
by written notice to the Managing Underwriters, designate such
additional or alternative agent for service of process that
(i) maintains an office located in the Borough of Manhattan,
City of New York in the State of New York, U.S.A., and (ii) is
either (x) counsel for the Company or (y) a corporate service
company which acts as agent for service of process for other
persons in the ordinary course of its business. Such written
notice shall identify the name of such agent for process and
the address of the office of such agent for process in the
Borough of Manhattan, City of New York, State of New York,
U.S.A.
<PAGE>
-39-
(b) Each of Heerema Holding Construction, Inc.
("Heerema") and Concord Partners Japan Limited ("Concord
Japan") hereby irrevocably (i) designates and appoints
[Corporation Trust System at 1633 Broadway, New York, New York
10019, U.S.A.], as its authorized agent upon which process may
be served in any suit or proceeding arising out of or relating
to this Agreement that may be instituted in any federal or
state court in the State of New York, U.S.A., or brought under
federal or state securities laws; (ii) submits to the
jurisdiction of any such court in any such suit or proceeding;
and (iii) irrevocably agrees that service of process upon
[Corporation Trust System] and written notice of said service
to such Selling Stockholder, shall be deemed in every respect
effective service of process upon such Selling Stockholder in
any such suit or proceeding. Each of Heerema and Concord Japan
agrees to take any and all action, including the execution and
filing of any and all such documents and instruments, as may be
necessary to continue such designation and appointment of
[Corporation Trust System] in full force and effect; provided,
--------
however, that such Selling Stockholders may, by written notice
- -------
to the Managing Underwriters, designate such additional or
alternative agent for service of process that (i) maintains an
office located in the Borough of Manhattan, City of New York in
the State of New York, U.S.A., and (ii) is either (x) counsel
for such Selling Stockholder or (y) a corporate service company
which acts as agent for service of process for other persons in
the ordinary course of its business. Such written notice shall
identify the name of such agent for process and the address of
the office of such agent for process in the Borough of
Manhattan, City of New York, State of New York, U.S.A.
14. Construction. This Agreement shall be governed
------------
by, and construed in accordance with, the laws of the State of
New York, U.S.A. The Section headings in this Agreement have
been inserted as a matter of convenience of reference and are
not a part of this Agreement.
15. Parties at Interest. The agreement herein set
-------------------
forth has been and is made solely for the benefit of the
Underwriters, the Company, the Selling Stockholders and the
controlling persons, directors and officers referred to in
Section 11 hereof, and their respective successors, assigns,
executors and administrators. No other person, partnership,
association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have
any right under or by virtue of this Agreement.
<PAGE>
-40-
16. Counterparts. This Agreement may be signed by
------------
the parties in counterparts which together shall constitute one
and the same agreement among the parties.
17. No Offers in Panama. The Shares have not been
-------------------
and will not be registered with the National Securities
Commission of the Republic of Panama in accordance with the
applicable provisions of Cabinet Decree No. 247 of 1970.
Accordingly, the Underwriters will not offer, sell or deliver
any of the Shares in the Republic of Panama.
<PAGE>
-41-
If the foregoing correctly sets forth the
understanding among the Company, the Selling Stockholders and
the Underwriters, please so indicate in the space provided
below for the purpose, whereupon this letter and your
acceptance shall constitute a binding agreement among the
Company, the Selling Stockholders and the Underwriters,
severally.
Very truly yours,
WILLBROS GROUP, INC.
By:__________________________________
Name:
Title:
HEEREMA HOLDING CONSTRUCTION, INC.
By:__________________________________
Name:
Title:
YORKTOWN ENERGY PARTNERS, L.P.
By: DR ASSOCIATES III, L.P.,
General Partner
By: DILLON, READ & CO. INC.
By:__________________________________
Name:
Title:
<PAGE>
-42-
CONCORD PARTNERS II, L.P.
By: VENTURE ASSOCIATES II,
L.P., General Partner
By: DILLON, READ INC.,
General Partner
By:__________________________________
Name:
Title:
CONCORD PARTNERS JAPAN LIMITED
By: DILLON, READ & CO. INC.,
Investment Manager
By:__________________________________
Name:
Title:
Accepted and agreed to as of
the date first above written,
on behalf of themselves and
the other several Underwriters
named in Schedule A
DILLON, READ & CO. INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: DILLON, READ & CO. INC.
By: _________________________
Name:
Title:
<PAGE>
STATE OF :
:
COUNTY OF :
BEFORE ME, a Notary Public in and for
County, , on this day personally appeared
, known to me to be the person and officer whose
name is subscribed to the foregoing Underwriting Agreement and
acknowledged to me that the same was the act of Willbros Group,
Inc., a Panamanian corporation, and that such person executed
the same for the purposes and consideration therein expressed,
and in the capacity therein stated.
GIVEN UNDER MY HAND and the seal of my office at
in County, , this the
day of July 1996.
______________________________
Notary Public in and for
The State of
My commission expires: ________
STATE OF :
:
COUNTY OF :
BEFORE ME, a Notary Public in and for
County, , on this day personally appeared
, known to me to be the person and officer whose
name is subscribed to the foregoing Underwriting Agreement and
acknowledged to me that the same was the act of Heerema Holding
Construction, Inc., a Panamanian corporation, and that such
person executed the same for the purposes and consideration
therein expressed, and in the capacity therein stated.
GIVEN UNDER MY HAND and the seal of my office at
in County, , this the day
of July 1996.
__________________________
Notary Public in and for
The State of
My commission expires: ________
<PAGE>
STATE OF :
:
COUNTY OF :
BEFORE ME, a Notary Public in and for
County, , on this day personally appeared
, known to me to be the person and officer whose
name is subscribed to the foregoing Underwriting Agreement and
acknowledged to me that the same was the act of Dillon, Read &
Co. Inc., a Connecticut corporation, as General Partner of DR
Associates III, L.P., a Delaware limited partnership, which is
the General Partner of Yorktown Energy Partners, L.P., a
Delaware limited partnership, and that such person executed the
same for the purposes and consideration therein expressed, and
in the capacity therein stated.
GIVEN UNDER MY HAND and the seal of my office at
in County, , this the day
of July 1996.
____________________________
Notary Public in and for
The State of
My commission expires: ________
STATE OF :
:
COUNTY OF :
BEFORE ME, a Notary Public in and for
County, , on this day personally appeared
, known to me to be the person and officer whose
name is subscribed to the foregoing Underwriting Agreement and
acknowledged to me that the same was the act of Dillon, Read
Inc., a Delaware corporation, as General Partner of Venture
Associates II, L.P., a Delaware limited partnership, which is
the General Partner of Concord Partners II, L.P., a Delaware
limited partnership, and that such person executed the same for
the purposes and consideration therein expressed, and in the
capacity therein stated.
GIVEN UNDER MY HAND and the seal of my office at
in County, , this the day
of July 1996.
____________________________
Notary Public in and for
The State of
My commission expires: ________
<PAGE>
STATE OF :
:
COUNTY OF :
BEFORE ME, a Notary Public in and for
County, , on this day personally appeared
, known to me to be the person and officer whose
name is subscribed to the foregoing Underwriting Agreement and
acknowledged to me that the same was the act of Dillon, Read &
Co. Inc., a Connecticut corporation, as investment manager of
Concord Partners Japan Limited, a Bahamian company limited by
guarantee, and that such person executed the same for the
purposes and consideration therein expressed, and in the
capacity therein stated.
GIVEN UNDER MY HAND and the seal of my office at
in County, , this the day
of July 1996.
_____________________________
Notary Public in and for
The State of
My commission expires: ________
STATE OF :
:
COUNTY OF :
BEFORE ME, a Notary Public in and for
County, , on this day personally appeared
, known to me to be the person and officer whose
name is subscribed to the foregoing Underwriting Agreement and
acknowledged to me that the same was the act of Dillon, Read &
Co. Inc., a Connecticut corporation, and that such person
executed the same for the purposes and consideration therein
expressed, and in the capacity therein stated.
GIVEN UNDER MY HAND and the seal of my office at
in County, , this the
day of July 1996.
_____________________________
Notary Public in and for
The State of
My commission expires: ________
<PAGE>
SCHEDULE A
Number of
Underwriter Firm Shares
- ----------- -----------
DILLON, READ & CO. INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
---------
Total. . . . . 6,000,000
---------
<PAGE>
-2-
SCHEDULE B
Number of
Selling Stockholders Firm Shares
- -------------------- -----------
Heerema Holding Construction, Inc. 4,964,520
Yorktown Energy Partners, L.P. 845,310
Concord Partners II, L.P. 165,700
Concord Partners Japan Limited 24,470
---------
Total. . . . . 6,000,000
---------
<PAGE>
-3-
SCHEDULE C
<PAGE>
-4-
SCHEDULE D
Constructora CAMSA, C.A.
The Oman Construction Company, LLC
Willbros Engineering & Construction Limited
Willbros (Nigeria) Limited
Willbros (Overseas) Limited
<PAGE>
EXHIBIT 3.2
Approved and Adopted June 27, 1996
WILLBROS GROUP, INC.
RESTATED BY-LAWS
----------------
Name, Offices and Seal
----------------------
1.1 The name of the corporation is Willbros Group, Inc.
1.2 The domicile of the corporation will be in Panama City, Republic of
Panama, but the corporation may establish offices, and the books of the
corporation may be kept, in any other place within or outside of the Republic of
Panama, as the Board of Directors may determine from time to time.
1.3 The corporate seal shall be circular in form and shall bear the name of
the corporation and Panama in the circumference and the words "Corporate Seal"
in the center.
Stockholders Meetings
---------------------
2.1 Annual meetings of stockholders shall be held each year, for the
election of directors and for the transaction of such other business as may
properly be brought before the meeting, at such time and place within or outside
the Republic of Panama as the Board of Directors may determine from time to
time.
2.2 Special meetings of the stockholders may be called by the Chairman of
the Board of Directors or by the President and shall be called by the President
or Secretary at the request of the holders of five (5) percent or more of the
stock outstanding. A special meeting so called shall be held at such time and
place within or outside of the Republic of Panama designated in the notice of
such meeting or in a duly executed waiver of notice thereof.
2.3 Notice of each annual and special meeting of the stockholders of the
corporation shall be given personally or by telegram, facsimile or mail to each
stockholder entitled to vote at such meeting, not less than ten (10) days nor
more than sixty (60) days before the meeting, stating the time, place and
business to be transacted.
2.4 In order that the corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
or for the purpose of any other lawful action, the Board of Directors may fix in
advance a record date in accordance with the laws of the Republic of Panama. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
2.5 The holders of a majority of the outstanding stock of the corporation
entitled to vote, present in person or represented by proxy, shall constitute a
quorum for the transaction of business at all annual and special stockholder
meetings. If, however, such quorum shall not be
<PAGE>
present or represented at any meeting of stockholders, the stockholders entitled
to vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. If the adjournment
is for more than thirty (30) days, or if after the adjournment a new record date
is fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record having voting power with respect to the
business to be transacted at such meeting. When a quorum is present at any
meeting, except where some larger percentage is affirmatively required by law or
by the Articles of Incorporation, all elections of directors and all other
questions shall be decided by a majority vote of the stock entitled to vote
thereon present or represented. Shares of outstanding stock of the corporation
held in the treasury of the corporation or held by any subsidiary of the
corporation shall not be deemed to be outstanding shares for the purpose of
voting or determining the presence of a quorum or the total number of shares
entitled to vote on any matter or for any other purpose. Any corporate action
taken by written consent of the stockholders shall be unanimous.
2.6 At any meeting of stockholders, the chairman of the meeting may appoint
one or more inspectors who shall subscribe an oath or affirmation to execute
faithfully the duties of inspectors with strict impartiality and according to
the best of their ability, to canvass the votes on any matter and make and sign
a certificate of the result thereof. No candidate for the office of director
shall be appointed as such inspector with respect to the election of directors.
If the chairman of the meeting does not appoint any inspector(s) such
inspector(s) shall be appointed upon the request of the holders of ten (10)
percent or more of the outstanding stock of the corporation present in person or
by proxy and entitled to vote on such matter.
2.7 All elections of directors shall be by ballot. The chairman of the
meeting may cause a vote by ballot to be taken upon any other matter, and such
vote by ballot shall be taken upon the request of the holders of ten (10)
percent or more of the outstanding stock of the corporation present in person or
by proxy and entitled to vote on such matter.
2.8 At every meeting of stockholders, all proxies shall be received and
taken in charge of and all ballots shall be received and canvassed by the
secretary of the meeting who shall decide all questions touching the
qualification of voters, the validity of the proxies, and the acceptance or
rejection of votes, unless an inspector or inspectors shall have been appointed,
in which event such inspector(s) shall perform such duties and decide such
questions with respect to the matter for which such inspector(s) have been
appointed.
Board of Directors
------------------
3.1 The Board of Directors shall have the general direction and management
of the properties, business and affairs of the corporation. The Board of
Directors may exercise all of the powers of the corporation except such as are
by law, by the Articles of Incorporation or by these By-laws conferred upon or
reserved to the stockholders. The Board of Directors shall fix the salaries and
terms of office of all officers of the corporation and shall have the power to
remove any officer, with or without cause, and fill any vacancy, for any reason
created.
3.2 The number of directors constituting the entire Board of Directors shall
be as set forth in the Articles of Incorporation.
-2-
<PAGE>
3.3 The Board of Directors shall be divided into three classes, designated
Class I, Class II and Class III, as set forth in the Articles of Incorporation.
3.4 Nominations of candidates for election as directors of the corporation
shall be in accordance with the procedure and requirements set forth in the
Articles of Incorporation.
3.5 Any vacancies in the Board of Directors for any reason, and any
directorships resulting from any increase in the number of directors, may be
filled by the Board of Directors as set forth in the Articles of Incorporation.
3.6 Meetings of the Board of Directors may be held in the Republic of Panama
or in any other country. A majority of the directors then in office shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors.
3.7 The first meeting of each newly elected Board of Directors shall, unless
otherwise specified by the President of the corporation, be held immediately
after and at the same place as, the annual meeting of stockholders. Notice of
such meeting to the newly elected directors shall not be necessary in order
legally to constitute the meeting, provided a quorum shall be present.
3.8 Regular meetings of the Board of Directors may be held without notice at
such time and place as shall be designated from time to time by the Board of
Directors. If the date fixed for any such regular meeting shall be a legal
holiday under the laws of the place where such meeting is to be held, then the
same shall be held on the next succeeding business day, not a Saturday, or at
such other time as may be determined by the Board of Directors. At such
meetings, the Board of Directors shall transact such business as may properly be
brought before the meeting.
3.9 Special meetings of the Board of Directors shall be held whenever called
by the Chairman of the Board, if any, the President or by two or more of the
directors. Notice of each such meeting shall be given to each director by
telephone, telegram, facsimile, in writing or in person at least three (3) days
(in the case of notice by telephone or in person) or five (5) days (in the case
of notice by telegram or facsimile) or seven (7) days (in the case of notice by
mail) before the time at which the meeting is to be held. Each such notice
shall state the time and place of the meeting to be so held. Except as
otherwise specifically provided in these By-laws, no notice of the objects or
purposes of any special meeting of the Board of Directors need be given, and,
unless otherwise indicated in the notice thereof, any and all business may be
transacted at any such special meeting. The Board of Directors may meet at any
time without call or notice, if all the directors are present personally or
represented by proxies as provided in the Articles of Incorporation or these By-
laws.
3.10 At any meeting of the Board of Directors, any director may be
represented and vote by proxy or proxies (who need not be directors) appointed
by an instrument in writing, public or private, with or without power of
substitution. One or more directors may participate in a meeting of the Board
of Directors, or of a committee of the Board of Directors, by means of
conference telephone or similar communications equipment by means of which all
persons
-3-
<PAGE>
participating in the meeting can hear and be heard by each other. Participation
in a meeting by such means shall constitute presence in person at such meeting.
3.11 A director may hold any remunerative office of profit with the
corporation in addition to the office of director. No director shall be
disqualified from entering into contracts, arrangements or dealings with the
corporation and no such contracts, arrangements or dealings shall be voided,
whether they be with the director or with a corporation in which he is
interested as member or director or officer or otherwise, and no director shall
be liable to account to the corporation for any profit arising out of any such
contract, arrangement or dealing, provided that such director discloses to the
directors of the corporation his interest in such contract, arrangement or
dealing at or before the time such contract, arrangement or dealing is
determined upon or entered into and such contract, arrangement or dealing is
approved by the Board of Directors.
3.12 The Board of Directors may appoint two or more of its number to
constitute an Executive Committee or any other committee or committees, who
shall have and exercise the powers of the Board of Directors in the management
of the business and affairs of the corporation to the extent and subject to the
restrictions expressed in the Articles of Incorporation, these By-laws or the
resolution appointing such committee or committees.
Officers
--------
4.1 The officers of the corporation shall be a President, a Secretary and a
Treasurer. The Board of Directors may appoint a Chairman of the Board of
Directors, a Vice Chairman of the Board of Directors, one or more Vice
Presidents, Assistant Secretaries, Assistant Treasurers and such other officers,
agents and representatives as it may deem advisable. The officers need not be
directors. The same person may hold two or more offices.
4.2 Subject to such extensions, limitations and other provisions as the
Board of Directors may from time to time prescribe, the officers of the
corporation shall have, in addition to such powers and duties as usually pertain
to their respective offices, the powers and duties hereinafter specified.
4.3 The Chairman of the Board of Directors, if any, shall preside at all
meetings of the stockholders and directors and shall perform such other duties
as the Board of Directors may assign. He shall possess the power to execute, in
the name and under the seal of the corporation, deeds, mortgages, bonds,
contracts, certificates and other instruments of the corporation, which may be
authorized by the Board of Directors, except as may be otherwise provided or
required by law, and except as may be otherwise expressly delegated by the Board
of Directors. At the request of the President, or in his absence or disability,
he shall exercise all the powers and discharge all the duties of the President.
The Vice Chairman of the Board of Directors, if any, shall perform the duties
and possess the powers of the Chairman of the Board of Directors, at his request
or in his absence or disability.
4.4 The President shall, in the absence of the Chairman and Vice Chairman of
the Board of Directors, if any, preside at meetings of the stockholders and
directors. He shall possess the power to execute, in the name and under the
seal of the corporation, deeds, mortgages, bonds,
-4-
<PAGE>
contracts, certificates and other instruments of the corporation, which may be
authorized by the Board of Directors, except as may be otherwise provided or
required by law, and except as may be otherwise expressly delegated by the Board
of Directors. He shall appoint and remove, employ and discharge, and fix the
compensation of all employees and agents of the corporation, other than the duly
appointed officers, subject to the approval of the Board of Directors. At the
request of the Chairman or Vice Chairman of the Board of Directors, or in their
absence or disability, he shall exercise all the powers and discharge all the
duties of the Chairman of the Board of Directors.
4.5 The Vice Presidents of the corporation, if any, shall, at the request of
the Chairman or Vice Chairman of the Board of Directors or the President, or in
their absence or disability, perform the duties and exercise the powers of the
Chairman of the Board of Directors or the President, and shall perform such
other duties as the Board of Directors may prescribe. At the discretion of the
Board of Directors, one or more Vice Presidents may be designated as an
Executive or Senior Vice President.
4.6 The Secretary shall attend all meetings of the Board of Directors and of
the stockholders and record all votes and the minutes of all proceedings in a
book to be kept for that purpose. The Secretary shall give or cause to be given
notice of all meetings of the stockholders and of the Board of Directors and
shall perform such other duties as may be prescribed by the Board of Directors
or the President, under whose supervision he shall be.
4.7 The Treasurer shall have the custody of the corporate funds and
securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation, and shall deposit all
moneys, and other valuable effects, in the name and to the credit of the
corporation, in such depositories as may be designated by the Board of
Directors. He shall render to the President and the directors, at regular or
special meetings of the Board of Directors, or whenever they may require it, an
account of all his transactions as Treasurer and of the financial condition of
the corporation.
4.8 Assistant Secretaries or Assistant Treasurers shall, at the request or
in the absence or disability of the Secretary or Treasurer, respectively,
perform the duties and exercise the powers of the Secretary and the Treasurer,
respectively, and shall perform such other duties as the Board of Directors may
prescribe.
4.9 The Board of Directors shall assign the duties of Chief Executive
Officer of the corporation to either the Chairman or Vice Chairman of the Board
of Directors or the President. Such duties shall include the authority and
powers necessary for the general management of the business, activities and
policies of the corporation, subject, however, to the control of the Board of
Directors.
4.10 The Board of Directors may assign the duties of Chief Operating Officer
of the corporation to any officer of the corporation. Such duties shall include
the authority necessary for the active management and general supervision of the
everyday business of the corporation and the duty to see that all orders and
policies of the Chief Executive Officer and the Board of Directors are carried
into effect.
-5-
<PAGE>
4.11 The Board of Directors may assign the duties of Chief Financial Officer
of the corporation to any officer of the corporation. Such duties shall include
the active management and supervision of the financial and accounting affairs of
the corporation.
4.12 In case of the absence of any officer of the corporation, or for any
other reason that the Board of Directors may deem sufficient, the Board of
Directors may delegate, for the time being, the powers and duties, or any of
them, of such officer to any other officer, or to any director, provided a
majority of the Board of Directors shall concur therein.
4.13 The officers shall be elected by the Board of Directors and shall hold
their offices until their successors shall have been duly elected or chosen and
qualify; but any officer or assistant may be removed from office, with or
without cause, at any time by resolution of the Board of Directors, for any
reason created.
4.14 The Board of Directors may require that the officers, agents or
employees of the corporation, or any one of them, shall give a bond for such
amount or amounts as the Board of Directors may designate and in form
satisfactory to it, to guarantee the faithful performance of his office.
Stock Certificates
------------------
5.1 The certificates of stock of the corporation shall be in the form
approved by the Board of Directors; they shall be consecutively numbered and
entered in the books of the corporation as issued. They shall contain the
information required by the laws of the Republic of Panama and shall be signed
by the Chairman of the Board of Directors or the President or a Vice President
and by the Treasurer or the Secretary or an Assistant Treasurer or Assistant
Secretary of the corporation. The shares of the corporation can be issued only
in registered form.
5.2 The corporation shall keep a Stock Register and Transfer Book in its
office in the Republic of Panama or in any other place within or outside the
Republic of Panama which the Board of Directors may determine.
5.3 The transfer of the registered stock shall be made on the books of the
corporation only by the person named in the certificate or by his attorney
legally appointed in writing upon delivery and surrender of the certificate
representing the shares.
5.4 The Board of Directors may order the closing of the stock transfer books
at its discretion, in accordance with the laws of the Republic of Panama, prior
to the date of any stockholders' meeting or of any dividend payment date, and
within such period no transfer of stock shall be recorded.
5.5 Any person claiming that a stock certificate has been lost or destroyed
must make an affidavit of the fact and file such affidavit with the Board of
Directors; and if the Board of Directors should so require, shall give an
indemnity bond to the corporation in such form and with such sureties as may be
satisfactory to the Board of Directors, for an amount as it may direct as
indemnity against any claim that may be made against the corporation with
respect
-6-
<PAGE>
thereto; thereupon a new certificate may be issued to him of the same tenor and
for the same number of shares as the certificate claimed to have been lost or
destroyed.
Dividends
---------
6.1 The Board of Directors may declare and pay dividends from the net
earnings of the corporation or from the surplus of its assets over its
liabilities and capital stock subject to any restrictions or limitations which
may be imposed thereon by law or by the Articles of Incorporation or by
resolution of the Board of Directors.
6.2 In order that the corporation may determine the stockholders entitled to
receive payment of any dividend, the Board of Directors may fix in advance a
record date in the same manner as is provided in the laws of the Republic of
Panama for the fixing of a record date for voting at a stockholders meeting.
6.3 When the distribution of dividends is ordered, payment will be made as
follows: A draft or check for the amount of the dividends corresponding to the
shares registered in a stockholder's name shall be mailed to such stockholder at
the address appearing in the books of the corporation.
Debentures
----------
7.1 The Board of Directors may authorize the issuance of corporate
debentures under such terms and conditions as the Board of Directors may deem
advisable. If the debentures are to be issued in payment for property to be
acquired by the corporation, the Board of Directors shall have absolute
discretion in fixing the value of the property and the price to be paid
therefor; and the resolution of the Board of Directors, adopted in good faith,
which fixes the value of the property acquired shall be final and conclusive as
to the value of such property. All obligations issued pursuant to this
paragraph shall bear the signature of an officer of the corporation.
Checks, Notes, Etc.
-------------------
8.1 All checks, notes, drafts and other documents for the payment of money
of the corporation shall be signed by the officer or officers or other persons
designated by the Board of Directors from time to time.
Fiscal Year
-----------
9.1 The fiscal year of the corporation shall begin on the first (1st) day of
January and shall end on the thirty-first (31st) day of December of each year.
Notices and Waivers
-------------------
10.1 Except as otherwise provided in the Articles of Incorporation or these
By-laws, whenever notice must be given, pursuant to law, the Articles of
Incorporation or these By-laws, to any stockholder, director or officer of the
corporation, such notice may be given in writing by mailing the same in a sealed
and stamped envelope addressed to the stockholder, director or
-7-
<PAGE>
officer at his address appearing on the books of the corporation. Notice shall
be deemed to have been given from the time when it is mailed. Any stockholder,
director or officer may waive any notice or call before, during or after the
meeting.
Amendments
----------
11.1 The Board of Directors, at any meeting, may alter or amend these By-
laws, but any alterations or amendments so made may be repealed by either the
Board of Directors or the stockholders.
Indemnification and Liability of Directors
------------------------------------------
12.1 Each person who was or is made a party to or is threatened to be made a
party to or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he or she is or was a director or officer of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including without limitation service
with respect to employee benefit plans (hereinafter an "indemnitee"), whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the corporation, it being understood that the indemnity provided in this Article
12.1 shall be to the fullest extent authorized by the laws of the Republic of
Panama, as the same exist or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the corporation
to provide broader indemnification rights than such law permitted the
corporation to provide prior to such amendment), against all expense, liability
and loss (including without limitation attorneys' fees, judgments, fines, excise
taxes or penalties, and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith and such indemnification
shall continue as to an indemnitee who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of such indemnitee's heirs,
executors and administrators; provided, however, that the corporation shall
indemnify any such indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if such proceeding (or part thereof) was
authorized by the Board of Directors of the corporation. The right to
indemnification conferred in this Article 12.1 shall be a contract right and
shall include the right to be paid by the corporation the expenses (including
without limitation attorneys' fees) incurred in defending any such proceeding in
advance of its final disposition (hereinafter an "advancement of expenses");
provided, however, that an advancement of expenses incurred by an indemnitee in
his or her capacity as a director or officer (and not in any other capacity in
which service was or is rendered by such indemnitee, including without
limitation service to an employee benefit plan) shall be made only upon delivery
to the corporation of an undertaking, by or on behalf of such indemnitee, to
repay all amounts so advanced if it shall ultimately be determined that such
indemnitee is not entitled to be indemnified for such expenses under this
Article 12.1 or otherwise.
12.2 The rights of indemnification and to the advancement of expenses
conferred in these By-laws shall not be exclusive of any other right which any
person may have or hereafter acquire under the Articles of Incorporation, these
By-laws, any statute, agreement, vote of stockholders
-8-
<PAGE>
or disinterested directors or otherwise. If any clause or provision of these
By-laws shall for any reason be determined to be invalid, the other provisions
hereof shall not be affected thereby but shall remain in full force and effect.
12.3 The corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the corporation would
have the power to indemnify such person against such expense, liability or loss
under the laws of the Republic of Panama.
12.4 The corporation may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification and to the advancement of
expenses, to any employee or agent of the corporation to the fullest extent of
the provisions under these By-laws with respect to the indemnification and
advancement of expenses of directors and officers of the corporation.
12.5 To the fullest extent permitted by the laws of the Republic of Panama,
as the same exist or may hereafter be amended, a director of the corporation
shall not be personally liable to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director. No amendment to or
repeal of this Article 12.5 shall apply to, or have any effect on, the liability
or alleged liability of any director of the corporation for or with respect to
any acts or omissions of such director occurring prior to such amendment or
repeal.
-9-
<PAGE>
EXHIBIT 4
Front of Certificate
--------------------
<TABLE>
<S> <C>
Organized under the Laws of the Republic of Panama by Public Instrument COMMON STOCK
No. 9,980, executed before Notary Public Number One of the Circuit of 35,000,000 SHARES AUTHORIZED
Panama, on December 23, 1991, recorded in the Public Registry Office of PAR VALUE U.S. $.05
Panama, Microfilm (Mercantile) Section, Microjacket 254895, Roll 34176,
Frame 0016, on December 31, 1991. The company has an authorized capital
of U.S. $37,960,000 divided into 35,000,000 shares of Common Stock with a
par value of five U.S. cents (U.S. $.05) per share; 362,000 shares of
Preferred Stock with a par value of one hundred U.S. dollars (U.S. $100.00)
per share; and 1,000,000 shares of Class A Preferred Stock with a par value
of one U.S. cent (U.S. $.01) per share.
</TABLE>
CS /Number/ SHARES
WILLBROS GROUP, INC.
Incorporated under the laws
of the Republic of Panama
This certificate is transferable CUSIP 969199 10 8
in New York, New York or in Dallas, Texas. See Reverse for
Certain Definitions
This Certifies that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, OF
WILLBROS GROUP, INC. transferable in person or by duly authorized attorney upon
surrender of this Certificate properly endorsed. This Certificate and the
shares represented hereby are subject to all of the terms, conditions and
limitations of the Articles of Incorporation and By-Laws of the Company, as
amended or restated (copies of which are on file with the Company and the
Transfer Agent), or as the same may be amended or restated hereafter, to all of
which the holder, by acceptance hereof, assents. This Certificate is not valid
until countersigned by the Transfer Agent and registered by the Registrar.
Witness the facsimile seal of the Company and the facsimile signatures of
its duly authorized officers.
Dated:
Countersigned and Registered:
[WILLBROS LOGO] ChaseMellon Shareholder Services, L.L.C.
Transfer Agent and Registrar
PRESIDENT TREASURER [SEAL]
BY:
Authorized Signature
<PAGE>
Back of Certificate
-------------------
WILLBROS GROUP, INC.
A COPY OF THE PROVISIONS SETTING FORTH THE POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF
EACH CLASS OF STOCK OF THE COMPANY OR SERIES THEREOF AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS MAY BE OBTAINED
WITHOUT CHARGE FROM THE TRANSFER AGENT OR FROM THE SECRETARY OF THE COMPANY.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIF MIN ACT-
________Custodian______
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants under Uniform Gifts to Minors
with right of survivorship Act _________________
and not as tenants in common (State)
Additional abbreviations may also be used though not in the above list.
For value received, _______________________ hereby sell, assign and
transfer unto
Please insert Social Security or
other identifying number of Assignee
_______________________________________________________________________________
Please print or typewrite name and address including postal zip code of assignee
_______________________________________________________________________________
_______________________________________________________________________________
_________________________________________________________________________Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint_____________________________________________
__________________________________________________Attorney to transfer the said
stock on the books of the within-named Company with full power of substitution
in the premises.
Dated,____________
X __________________________________
NOTICE: (SIGNATURE)
The signature to this assignment
must correspond with the name as
written upon the face of the
Certificate in every particular
without alteration or enlargement or
any change whatsoever. X __________________________________
(SIGNATURE)
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN "ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), AS DEFINED
IN RULE 17Ad-15 UNDER THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED.
SIGNATURE(S) GUARANTEED BY:
<PAGE>
EXHIBIT 5.1
[Arias, Fabrega & Fabrega letterhead]
July 11, 1996
Willbros Group, Inc.
Edificio Torre Banco Germanico
Calle 50 y 55 Este, Apartado 850048
Panama 5, Republic of Panama
Re: Willbros Group, Inc. - Registration
Statement on Form S-1 (File No. 333-5413)
(the "Registration Statement")
-------------------------------------------------
Gentlemen:
We have acted as Panamanian counsel for Willbros Group, Inc., a Republic of
Panama corporation (the "Company"), in connection with the proposed public
offering of an aggregate of up to six million nine hundred thousand (6,900,000)
shares of the Company's Common Stock, par value $.05 per share (the "Shares"),
of which up to (i) six million (6,000,000) shares will be sold by certain
stockholders of the Company (the "Selling Stockholders"), and (ii) nine hundred
thousand (900,000) shares will be sold by the Company subject to an over-
allotment option granted by the Company to the underwriters offering the Shares.
As described in the Registration Statement, the Company and the Selling
Stockholders are selling the Shares pursuant to an Underwriting Agreement (the
"Underwriting Agreement") to be entered into among the Company, the Selling
Stockholders and Dillon, Read & Co. Inc. and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, as the managing underwriters.
In reaching the conclusions expressed in this opinion, we have (a) examined
such certificates of public officials and of corporate officers and directors
and such other documents and matters as we have deemed necessary or appropriate,
(b) relied upon the accuracy of facts and information set forth in all such
documents, and (c) assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as copies, and the authenticity of
the originals from which all such copies were made.
Based on the foregoing, we are, of the opinion that:
1. The Shares to be sold by the Selling Stockholders have been duly
authorized and upon conversion of the preferred stock of the Company owned by
the Selling Stockholders into such Shares, such Shares will be validly issued,
fully paid and non-assessable shares of Common Stock of the Company.
<PAGE>
2. The Shares to be sold by the Company have been duly authorized and,
when issued, delivered and paid for in accordance with the terms and conditions
of the Underwriting Agreement, will be validly issued, fully paid and non-
assessable shares of Common Stock of the Company.
We are licensed to practice in the Republic of Panama and we express no
opinion as to the laws of any jurisdiction other than the Republic of Panama.
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to our firm in the Registration Statement and the
Prospectus covering the Shares constituting a part thereof under the captions
"Management - Limitations on the Liability of Directors and Indemnification
Matters", "Certain Income Tax Considerations", "Legal Matters", "Enforceability
of Civil Liabilities Under the Federal Securities Laws" and "Item 14 -
Indemnification of Directors and Officers".
Very truly yours,
ARIAS, FABREGA & FABREGA
/s/ L.W. Watson III
L.W. Watson III
<PAGE>
EXHIBIT 10.3
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered
into as of the 1st day of January, 1996, by and among Willbros USA, Inc.
("Employer"), a Delaware, U.S.A. corporation; Larry J. Bump ("Employee");
and Willbros Group, Inc. ("WGI"), a Republic of Panama corporation.
RECITALS
--------
A. Employee is currently the President, Chief Executive Officer
and Chief Operating Officer of Employer.
B. Employer is, indirectly, a wholly owned subsidiary of WGI.
C. Employee is one of the senior executives of a group of companies
comprised of WGI and its subsidiaries, including Employer (collectively,
"Willbros").
D. Employer and Employee wish to establish conditions and incentives
for the continuation of Employee's employment with Employer.
E. WGI expects to derive, indirectly, substantial benefit from
the continuation of Employee's employment with Employer.
NOW, THEREFORE, in consideration of the above recitals and the mutual
convenants herein contained, the parties hereto, intending to be legally
bound, agree as follows:
1. Employment. Employer hereby employs Employee, and Employee hereby
----------
accepts employment with Employer, upon the terms and conditions hereinafter
set forth.
2. Term. This Agreement is intended to supersede and replace that
----
certain Employment Agreement entered into by Employer, Employee and WGI
on April 9, 1992 and amended effective November 15, 1995 (the "Prior
Agreement") if an initial public offering of WGI's stock pursuant to a
registration under the U.S. Securities Act of 1993, as amended, in an amount not
less than U.S.$20,000,000 becomes effective not later than December 31, 1996
(the "1996 IPO"). If the 1996 IPO does not occur, this Agreement shall
automatically terminate effective December 31, 1996, the Prior Agreement shall
be deemed to have continued in full force and effect without interruption and
the terms of the Prior Agreement shall in all instances prevail over the terms
of this Agreement. If the 1996 IPO does occur, the Prior Agreement shall be
deemed to have terminated December 31, 1995 and have no further force or effect
whatsoever and this Agreement, except as otherwise provided in Paragraph 9, 10,
12, 14 or 15 below, shall be effective for the period beginning on January 1,
1996 and ending on December 31, 1998. If a Change of Control (as defined
<PAGE>
in Paragraph 14(b) below) occurs prior to December 31, 1998, Employees shall be
entitled to the severance payments specified in Paragraph 14 unless Employee
and Employer enter into a mutually acceptable employment agreement providing
for the employment of Employee (including appropriate incentive compensation
arrangements on terms not less favorable to Employee than those which apply to
calendar year 1998 pursuant to Paragraph 5 below) during the three (3) year
period commencing on January 1, 1999.
3. Duties. Employee shall serve as the President, Chief Executive
------
Officer and Chief Operating Officer of Employer, subject at all times to the
direction of Employer's Board of Directors, and shall fulfill the duties
customarily incident to such position in the pipeline and related facility
construction and engineering industry. Employee shall devote substantially all
of his business time and attention and his best efforts to the performance of
his duties hereunder. The foregoing notwithstanding, Employer and Employee
recognize and agree that Employee may engage in passive personal investments,
the performance of business or managerial duties generally consistent with those
currently being performed by Employee in connection with such investments and
such other business activities as do not conflict with the business and affairs
of Employer or interfere with Employee's performance of his duties hereunder.
4. Compensation. As compensation for the performance by Employee
------------
of the duties specified herein, Employee shall be paid as follows during
the term of this Agreement:
(a) Employee shall receive an annual base salary equal to Employee's
total annual base salary currently in effect with his present Willbros
employer ("Base Salary"), payable in equal semi-monthly installments.
Employer's Board of Directors shall review such Base Salary at least
annually and may increase, but not decrease, such Base Salary at any
time, taking into account performance, experience, economic circumstances
and other relevant factors. Employee's Base Salary shall not at any time
be less than Employee's total annual Base Salary currently in effect with
his present Willbros employer, adjusted for cost of living increases.
(b) Subject to Paragraph 5 below, Employee may receive bonuses
at the discretion of the Board of Directors of Employer at any time.
(c) All salary and bonus payments to Employee shall be subject
to normal payroll withholding tax deductions.
5. Incentive Plan. Employee shall be eligible to participate in
--------------
that certain Willbros USA, Inc. Management Incentive Plan dated January
1, 1996 (as the same may be amended from time to time, the "Incentive Plan")
during calendar years 1996 through 1998.
2
<PAGE>
6. Other Employment Benefits. Employee shall be entitled to
-------------------------
participate in any group insurance or other employee benefit plan generally
available to other executives of Employer, upon terms generally applicable
to other executives of Employer or upon such other terms as Employer may
determine, provided that such different terms are not less favorable to
Employee.
7. Expenses. In addition to the compensation described in Paragraphs
--------
4 and 5 above, Employee shall be entitled to reimbursement of Employee's
actual out-of-pocket expenses incurred in the conduct of Employer's business,
all of which expenses shall be limited to ordinary and necessary items and
shall be supported by vouchers, receipts or similar documentation to the
extent practicable and required by law.
8. Vacations. Employee shall be entitled to an annual vacation
---------
with pay, in accordance with Employer's policies generally applicable to
its executives, at such times as will not unduly interfere with or hamper
the operation of Employer's business.
9. Confidentiality. Employee covenants and agrees that, during
---------------
and for a period of two (2) years after termination of Employee's employment
with Employer, Employee shall not furnish, disclose or make accessible to
any person, entity or governmental authority, any knowledge or information,
trade secrets, customer information or lists, supplier information or lists,
plans, devices, material or financial or other information with respect to
the business of Willbros or any secret, confidential or sensitive research
or development work, promotions, ideas, opportunities, business plans or designs
relating to the business of Willbros, except as may be necessary in the
furtherance and conduct of Willbros' business and except as may otherwise
be required by law. The prohibitions of this Paragraph 9 shall not apply,
however, to information in the public domain (but only if the same becomes
part of the public domain through a means other than a disclosure prohibited
hereunder). The provisions of this Paragraph 9 shall survive expiration
or termination of this Agreement.
10. Non-Competition. In the event Employee voluntarily terminates
---------------
his employment hereunder or retires during the term of this Agreement,
Employer may, by written notice provided to Employee on or before the effective
date of Employee's termination, elect to require Employee to comply with
the non-competition provisions of this Paragraph 10. If Employer provides
such notice, Employee, for a period of two (2) years from the date of his
termination or retirement, will not compete, directly or indirectly, with
the businesses being conducted by Willbros on the date of such termination
or retirement in the countries where Willbros is then conducting business,
and Employer will pay Employee on the first business day of each month during
such two (2) year non-compete period an amount equal to one twenty-fourth
(1/24) of Employee's annual Base Salary in effect on Employee's date of
termination or retirement. Such payments shall be regarded solely as
consideration for Employee's compliance with the requirements of this Paragraph
10 and shall not constitute salary or severance pay. Notwithstanding the
foregoing, if Employer requires Employee to comply with the non-competition
provisions hereof, Employee shall
3
<PAGE>
not be prohibited from owning (other than in a managerial capacity) up to ten
percent (10%) of the publicly traded stock of a corporation trading on a
recognized securities exchange or in an over-the-counter market, which
corporation is in competition with Willbros. It is expressly understood and
agreed that Employer and Employee consider the restrictions contained in this
Paragraph 10 to be reasonable and necessary for the purposes of preserving and
protecting the goodwill and proprietary information of Employer. The provisions
of this Paragraph 10 shall survive expiration or termination of this Agreement.
11. Benefits and Remedies.
---------------------
(a) The benefits of Paragraphs 9 and 10 above shall flow to
and be enforceable by Employer and any of its Affiliates (as defined in
Paragraph 11(d) below) and their respective successors and assigns. The
parties hereto recognize that, because of the nature of the subject
matter of Paragraphs 9 and 10 above, it would be impractical and
extremely difficult to determine Employer's or its Affiliates' actual
damages in the event of a breach of any of such provisions. Accordingly,
if Employee commits a breach, or threatens to commit a breach, of
Paragraph 9 or 10 above, Employer shall give Employee written notice of
such violation and, if Employee does not cure such violation or otherwise
cease to act in violation of the applicable Paragraph within ten (10)
days of the giving of such notice (provided that the curing of such
violation shall not prevent Employer or any of its Affiliates or any of
their successors or assigns from seeking recovery of their respective
actual damages resulting from such violation), Employer or any of its
Affiliates or any of their successors or assigns shall have the right to
have the provisions of said Paragraph 9 or 10, as applicable,
specifically enforced, by injunctive or other equitable relief, by any
court having equity jurisdiction, it being acknowledged and agreed by
Employee that any such breach or threatened breach will cause irreparable
injury to Employer or its Affiliates and that an injunction may be issued
against Employee to stop or prevent any such breach or threatened breach.
In the event that an action shall be instituted to specifically enforce
Employee's obligations hereunder, Employee shall, to the fullest extent
permitted by applicable law, waive the defense that Employer and its
Affiliates have an adequate remedy at law and shall interpose no
opposition, legal or otherwise, as to the propriety of pursuing specific
performance as a remedy and shall not request any bonding for the
issuance of the relief sought.
(b) Each of the rights and remedies enumerated in Paragraph 11(a)
above shall be independent of the others, and shall be severally
enforceable, and all such rights and remedies shall be in addition to,
and not in lieu of, any other rights and remedies available to Employer
and its Affiliates and their respective successors and assigns under law
or in equity or pursuant to any other agreement binding upon the parties.
4
<PAGE>
(c) In any action at law or equity to enforce any of the provisions
or rights under Paragraph 9 or 10 above, the unsuccessful party to such
litigation, as determined by the court in a final judgment or decree,
shall pay the successful party or parties all costs, expenses and
reasonable attorneys' fees and disbursements incurred therein by such
party or parties (including without limitation such costs, expenses and
fees on any appeals), and if such successful party or parties shall
obtain a judgment in any such action or proceeding, such costs, expenses
and attorneys' fees shall be included as part of such judgment.
(d) For purposes of this Paragraph 11, the term "Affiliate"
with respect to Employer, shall mean any other person or entity directly
or indirectly controlling, controlled by or under direct or indirect
common control with Employer.
12. Termination. This Agreement may be terminated prior to December
-----------
31, 1998 as follows:
(a) Upon Employee's death, in which case the Base Salary and,
except as provided in the Incentive Plan, all other rights and benefits
to which Employee is entitled hereunder shall be prorated through the
end of the month in which Employee's death occurs.
(b) By Employer, at its sole option, immediately upon written
notice to Employee, for cause. "Cause" for termination shall be limited
to one or more of the following:
(i) Proven or admitted theft, embezzlement or the
perpetration of any criminal fraud by Employee against Willbros
in connection with his employment with Willbros;
(ii) The intentional misappropriation by Employee, for
his own personal benefit, of any material corporate opportunity,
without having first offered such corporate opportunity to Willbros
or obtained other authorization by Willbros; or
(iii) The intentional commission of any felonious act by
Employee in connection with his employment with Willbros, which
act is known to Employee to be a felonious act and has not been
specifically authorized by Willbros.
Except as otherwise provided in Paragraph 14 below, in the event of
termination of this Agreement for any of the causes enumerated in
this Paragraph 12(b), Employer's obligation, if any, to pay Employee
shall cease immediately.
5
<PAGE>
(c) By Employer, at its sole option, upon the Disability of
Employee. "Disability" for this purpose shall mean total and permanent
incapacity of Employee to perform the usual duties of his employment,
which shall be deemed to exist when certified by a physician who is
mutually acceptable to Employee and Employer. Except as otherwise
provided in Paragraph 14 below, in the event of a termination
pursuant to this Paragraph 12(c), (i) the Base Salary and, except as
provided in the Incentive Plan, all other rights to which Employee is
entitled hereunder shall be prorated through the end of the month in
which the effective date of such termination occurs, and (ii) Employee
shall be entitled to such compensation and benefits as are provided in
any long-term disability insurance policy or certificate covering
Employee, if any.
(d) By Employee, at his sole option, upon written notice to
Employer at least five (5) days prior to the effective date of termination
set forth in such notice if a Change of Control (as defined in Paragraph
14(b) below) has occurred and Employee gives notice of termination within
twelve (12) months after the occurrence of such Change of Control. In the
event of termination of this Agreement pursuant to this Paragraph 12(d),
the Base Salary and, except as provided in the Incentive Plan, all other
rights to which Employee is entitled hereunder shall be prorated through
the end of the month in which the effective date of such termination
occurs. In addition, if applicable, Employee shall be entitled to the
payments due under Paragraph 14 below.
(e) By Employee, in the case of Employer's substantial breach
of this Agreement (including without limitation termination by Employer
other than as allowed hereby). If Employee terminates this Agreement
because of Employer's substantial breach of this Agreement, Employee
shall be entitled to receive Employee's Base Salary (as in effect at the
time of the breach) for the remainder of the term of this Agreement (in
which case such sum shall be paid monthly over such period); however, if
Paragraph 14 hereof is applicable at the time of the breach and the
payments under such Paragraph 14 are greater than payments due under this
Paragraph 12(e), Employee may elect to receive the Paragraph 14 payments.
To effect termination by reason of a substantial breach of this Agreement
by Employer, Employee must have given written notice of such breach to
Employer and Employer must have failed to cure such breach within fifteen
(15) days of the date such notice is deemed to have been delivered.
(f) By Employee, for any reason other than those set forth in
Paragraphs 12(a), 12(d) and 12(e) above, upon written notice to Employer
at least thirty (30) days prior to the effective date of termination set
forth in such notice. In the event of a termination of this Agreement
pursuant to this Paragraph 12(f), Employer's obligations to pay Employee,
except as provided in the Incentive Plan, shall cease on the effective
date of such termination.
6
<PAGE>
The termination of this Agreement under this Paragraph 12 shall not affect the
provisions of Paragraph 9, 10, 14 or 15 (to the extent applicable) hereof or
this Paragraph 12, which shall remain in full force and effect for the
applicable time period, provided, however, if Employee rightfully terminates
this Agreement under Paragraph 12(e) above, only the prohibition of Paragraph 9
above shall apply in accordance with its terms and Paragraph 10 above shall
not apply.
13. Miscellaneous.
-------------
(a) Each party bound by this Agreement agrees to perform any
further acts and to execute and deliver any additional documents which
may reasonably be necessary to carry out the provisions of this
Agreement.
(b) This Agreement may not be assigned by either of the parties
hereto without the prior written consent of the other. Subject to the
foregoing, this Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective heirs, legal
representatives, successors and assigns, each of which shall execute such
instruments and take such actions as are necessary or appropriate to
carry out the purposes of this Agreement. Except as provided herein,
nothing in this Agreement, express or implied, is intended or shall be
construed to give to any person other than the parties hereto any right,
remedy or claim under or by reason of this Agreement.
(c) This Agreement, together with the Incentive Plan and the
other employee benefit plans referenced in Paragraph 6 above as the same
may be amended from time to time, constitutes the entire agreement and
understanding between the parties hereto, and supersedes any prior
agreement or correspondence, relating to the subject matter hereof. This
Agreement may be modified or amended only by a written instrument
executed by the parties hereto.
(d) The use of headings and captions herein is solely for the
convenience of the parties hereto and shall not limit or otherwise affect
the construction of any of the terms or provisions hereof.
(e) This Agreement shall be governed by the laws of the State of
New York, U.S.A., without regard to the principles of conflict of laws.
(f) No waiver of any term, provision or condition of this
Agreement shall be effective unless in writing signed by the party
granting the waiver, and no such waiver shall be deemed to be or
construed as a further or continuing waiver of such term, provision or
condition or as a waiver of any other term, provision or condition of
this Agreement, unless specifically so stated in such waiver.
7
<PAGE>
(g) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which together
shall be deemed to be one and the same instrument.
(h) If any covenant or agreement contained herein, or any part
hereof, is held to be unenforceable for any reason, the remainder of this
Agreement shall be construed as if such provision or part thereof was not
included herein; provided, that if the unenforceability of any such
covenant or agreement is because of the breadth of its scope, the
duration of such provision or the geographical area covered thereby, the
parties agree that such provision shall be amended, as determined by the
court, so as to reduce the breadth of the scope or the duration and/or
geographical area of such provision such that, in its reduced form, said
provision shall then be enforceable.
(i) All notices and other communications required or permitted
hereunder shall be in writing, and shall be deemed to have been delivered
on the date delivered by hand, telegram, facsimile, or by similar means,
or on the third (3rd) day following the day when sent by recognized
courier or overnight delivery service (fees prepaid), or on the fifth
(5th) day following the day when deposited in the mail, registered or
certified (postage prepaid), addressed as follows:
If to Employee: Larry J. Bump
7538 South Gary Place
Tulsa, Oklahoma 74136
U.S.A.
If to Employer: Willbros USA, Inc.
Suite 700, 2431 East 61st Street
Tulsa, Oklahoma 74136
U.S.A.
If to WGI: Willbros Group, Inc.
Edificio Torre Banco Germanico
Calle 50 y 55 Este, Apartado 850048
Panama 5, Republic of Panama
With a copy to: John N. Hove, Esq.
Suite 200, 2431 East 61st Street
Tulsa, Oklahoma 74136
U.S.A.
Either party may change its address for receiving notices by giving written
notice of such change to the other party in accordance with this Paragraph
13(i).
8
<PAGE>
14. Change of Control.
-----------------
(a) If a Change of Control (as defined in Paragraph 14(b) below)
occurs and Employee's employment is terminated for any reason (whether
voluntarily or involuntarily) within twelve (12) months of such Change of
Control, Employee shall be entitled to elect to receive a severance
payment equal to the sum of (i) three (3) times his Base Salary; (ii)
three (3) times the average incentive payment earned under the Incentive
Plan (or a similar predecessor incentive plan) for the three (3) full
calendar years preceding his termination of employment; and (iii) the
Special Retirement Benefit (as defined in paragraph 14(d) below).
(b) The term "Change of Control" means and will be deemed to have
occurred if (i) any person, other than WGI or a Related Party, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended), directly or indirectly, of
securities of WGI representing twenty (20%) or more of the total voting
power of all the then outstanding voting securities of WGI ("Voting
Securities"); or (ii) any person, other than WGI or a Related Party,
purchases or otherwise acquires, under a tender offer, securities
representing, when combined with other securities of WGI owned by such
person, twenty percent (20%) or more of the total voting power of all the
then outstanding Voting Securities; or (iii) the individuals (A) who as of
the date hereof constitute the Board of Directors of WGI (the "Board") or
(B) who hereafter are elected to the Board and whose election, or
nomination for election, to the Board was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors as of the date hereof or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority of the members of the Board; or (iv) the stockholders of WGI
approve a merger, consolidation, recapitalization or reorganization of WGI
or an acquisition of securities or assets by WGI, or consummation of any
such transaction if stockholder approval is not obtained (other than any
such transaction which would result in the Voting Securities outstanding
immediately prior thereto continuing to represent, either by remaining
outstanding or by being converted into voting securities of the surviving
entity, at least eighty percent (80%) of the total voting power
represented by the voting securities of the surviving entity outstanding
immediately after such transaction and in or as a result of which the
voting rights of each Voting Security relative to the voting rights of all
other Voting Securities are not altered); or (v) the stockholders of WGI
approve a plan of complete liquidation of WGI, or an agreement for the
sale or disposition by WGI of all or substantially all of WGI's assets,
other than any such transaction which would result in a Related Party
owning or acquiring more than fifty percent (50%) of the assets owned by
WGI immediately prior to the transaction; or (vi) the Board adopts a
resolution to the effect that a Change of Control has occurred and the
transaction giving rise to such resolution has been approved by the
stockholders of WGI or been consummated if such approval is not sought.
9
<PAGE>
(c) The term "Related Party" means (i) a majority owned direct or
indirect subsidiary of WGI, (ii) an employee or group of employees of
WGI or of any majority owned direct or indirect subsidiary of WGI, (iii)
a trustee or other fiduciary holding securities under an employee
benefit plan of WGI or any majority owned direct or indirect subsidiary
of WGI, (iv) a corporation owned directly or indirectly by the
stockholders of WGI in substantially the same proportion as their
ownership of stock of WGI, (v) Heerema Holding Construction, Inc., or
(vi) Yorktown Energy Partners, L.P.
(d) The term "Special Retirement Benefit" means an amount
calculated such that, when added to any benefits payable to the Employee
under the Willbros USA, Inc. Pension Plan (the "Pension Plan") and the
Willbros Group, Inc. Executive Benefit Restoration Plan (collectively,
the "Other Retirement Benefits"), the total retirement benefits the
Employee receives from the Employer will at least equal the amount which
the aggregate of the Other Retirement Benefits would have been if the
Employee retired on a date three (3) years following the date of his
employment termination and the Percentage of Early Pension Payable (as
described in the Pension Plan) was calculated using a discount percent
per year not exceeding one and one-half percent (1 1/2%) from age sixty-
five. For purposes of calculating the Special Retirement Benefit and the
Other Retirement Benefits under this Agreement, the following will
apply:
(i) The Employee will be deemed to have continued his
employment for a three (3) year period beginning on the date of
his termination at his basesalary in effect on the date of
termination; and
(ii) The Employee will be deemed to have received
compensation under the Incentive Plan (or a similar predecessor
incentive plan) for each year of such three (3) year period in an
amount equal to the average annual incentive payment earned under
the Incentive Plan for the three (3) full calendar years
preceding his termination of employment.
(e) The provisions of this Paragraph 14 shall survive expiration
or termination of this Agreement.
15. Tax Gross-Up Payments.
---------------------
(a) The parties recognize that the payments under this Agreement,
including without limitation, payments under Paragraph 14 above, and
other compensation, benefits, payments and distributions under the
Incentive Plan or other plans or compensation arrangements with respect
to Employee may be subject to the excise tax imposed under Section 4999
of the U.S. Internal Revenue
10
<PAGE>
Code of 1986 (as amended, the "Code"). In such event, Employer will pay
Employee one or more cash payments ("Gross-up Payment") sufficient to
pay such excise tax, together with any interest or penalties incurred by
Employee relative thereto and any federal and state excise or income
taxes resulting from payments made pursuant to this Paragraph 15
(collectively, the "Excise Tax").
(b) Subject to the provisions of Paragraph 15(c) hereof, all
determinations required to be made under this Paragraph 15, including
without limitation whether the Gross-up Payment is required and the
amount of the Gross-up Payment, will be made by an accounting firm
selected by Employee and approved by Employer, which approval will not
be unreasonably withheld. Employee will provide the accounting firm any
information reasonably requested by it necessary to make such
determination, including without limitation copies of Employee's tax
returns for the periods affected, all of which will be maintained in
confidence by the accounting firm. The accounting firm will provide
detailed supporting calculations together with its written opinion with
respect to the accuracy of such calculations to Employer and Employee
within fifteen (15) business days of the date of termination of
Employee's employment or such earlier time as is requested by Employee
or Employer and agreed to by the accounting firm. All fees and expenses
of the accounting firm will be borne solely by Employer. The initial
Gross-up Payment, if any, as determined pursuant to this Paragraph
15(b), will be paid to Employee within five (5) days after Employee's
receipt of the accounting firm's determination. If the accounting firm
determines that no Excise Tax is payable by Employee, it will also
furnish Employee with an opinion that failure to report the Excise Tax
on Employee's applicable federal income tax return would not result in
the imposition of a negligence or similar penalty. In the absence of
such an opinion, a Gross-up Payment in the amount which the accounting
firm determines to be payable will be due and payable to Employee.
Except as provided in the preceding sentence, any determination by the
accounting firm will be binding upon all of the parties hereto. As a
result of uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the accounting firm hereunder,
it is possible that Gross-up Payments which will not have been made by
Employer should have been made, consistent with the calculations
required to be made hereunder (the "Underpayment"). In the event that
Employer exhausts the remedies provided in Paragraph 15(c) hereof and
Employee thereafter is required to make a payment of any Excise Tax, the
accounting firm will determine the amount of the Underpayment that has
occurred and any such Underpayment will be promptly paid by Employer to
or for the benefit of Employee.
(c) Employee will notify Employer in writing of any claim by the
U.S. Internal Revenue Service (the "IRS") that, if successful, would
require the payment by Employer of the Gross-up Payment; provided, that
failure by Employee to give such notification will not affect any of
Employee's rights or the obligations of Employer under this Agreement.
Such notification will be given as soon as
11
<PAGE>
practicable but no later than ten (10) business days after Employee
knows of such claim and will apprise Employer of the nature of such
claim and the date on which such claim is requested to be paid. Employee
will not pay such claim prior to the expiration of the thirty (30) day
period following the date on which Employee gives such notice to
Employer (or such sooner period ending on the date that any payment of
taxes with respect to such claim is due). If Employer notifies Employee
in writing prior to the expiration of such period that it desires to
contest such claim, Employee will:
(i) give Employer any information reasonably
requested by Employer relating to such claim;
(ii) take such action in connection with contesting
such claim as Employer may reasonably request in writing
from time to time, including without limitation accepting
legal representation with respect to such claim by an
attorney reasonably selected by Employer;
(iii) cooperate with Employer in good faith in
order effectively to contest such claim; and
(iv) permit Employer to participate in any
proceedings relating to such claim;
provided, however, that Employer will bear and pay directly all costs
and expenses (including without limitation additional interest and
penalties) incurred in connection with such contest and will indemnify
and hold Employee harmless, on an after-tax basis, for any Excise Tax or
income tax, including without limitation interest and penalties with
respect thereto, imposed as a result of such representation, and payment
of costs and expenses. Without limiting the foregoing, Employer will
control all proceedings taken in connection with such contest and, at
the sole option of Employer, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option,
either direct Employee to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and Employee will prosecute
such contest to a determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more appellate courts, as
Employer may determine; provided, however, that if Employer directs
Employee to pay such claim and sue for a refund, Employer will advance
the amount of such payment to Employee, on an interest-free basis, and
will indemnify and hold Employee harmless, on an after-tax basis, from
any Excise Tax, including without limitation interest or penalties with
respect thereto, imposed with respect to such advance or with respect to
any imputed income with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of
taxes for the taxable year of Employee with respect to which such
contested amount is claimed to be due
12
<PAGE>
is limited solely to such contested amount. Furthermore, the control of
the contest by Employer will be limited to issues with respect to which
a Gross-up Payment would be payable hereunder and Employee will be
entitled to settle or contest, as the case may be, any other issue
raised by the IRS or any other taxing authority.
(d) If, after the receipt by Employee of an amount advanced by
Employer pursuant to Paragraph 15(c) hereof, Employee becomes entitled
to receive any refund with respect to such claim, Employee will (subject
to compliance by Employer with the requirements of Paragraph 15(c)
hereof) promptly pay to Employer the amount of such refund (together
with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by Employee of an amount advanced by
Employer pursuant to Paragraph 15(c) hereof, a determination is made
that Employee will not be entitled to any refund with respect to such
claim and Employer does not notify Employee in writing of its intent to
contest such denial of refund prior to the expiration of thirty (30)
calendar days after such determination, then such advance will be
forgiven and will not be required to be repaid and the amount of such
advance will offset, to the extent thereof, the amount of Gross-up
Payment required to be paid. Any contest of a denial of refund will be
controlled by Paragraph 15(c) hereof.
(e) The provisions of this Paragraph 15 shall survive expiration
or termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed, or have caused to
be executed, this Employment Agreement on the day and year first set forth
above.
"Employer"
WILLBROS USA, INC.
By: /s/ Melvin F. Spreitzer
-----------------------------------
Name: Melvin F. Spreitzer
---------------------------------
Title: Executive Vice President
--------------------------------
"Employee"
/s/ Larry J. Bump
--------------------------------------
13
<PAGE>
WILLBROS GROUP, INC.
By: /s/ Melvin F. Spreitzer
-----------------------------------
Name: Melvin F. Spreitzer
---------------------------------
Title: Executive Vice President
--------------------------------
14
<PAGE>
EXHIBIT 10.4
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered
into as of the 1st day of January, 1996, by and among Willbros USA, Inc.
("Employer"), a Delaware, U.S.A. corporation; Melvin F. Spreitzer ("Employee");
and Willbros Group, Inc. ("WGI"), a Republic of Panama corporation.
RECITALS
--------
A. Employee is currently the Executive Vice President, Treasurer
and Chief Financial Officer of Employer.
B. Employer is, indirectly, a wholly owned subsidiary of WGI.
C. Employee is one of the senior executives of a group of companies
comprised of WGI and its subsidiaries, including Employer (collectively,
"Willbros").
D. Employer and Employee wish to establish conditions and incentives
for the continuation of Employee's employment with Employer.
E. WGI expects to derive, indirectly, substantial benefit from
the continuation of Employee's employment with Employer.
NOW, THEREFORE, in consideration of the above recitals and the mutual
convenants herein contained, the parties hereto, intending to be legally
bound, agree as follows:
1. Employment. Employer hereby employs Employee, and Employee hereby
----------
accepts employment with Employer, upon the terms and conditions hereinafter
set forth.
2. Term. This Agreement is intended to supersede and replace that
certain Employment Agreement entered into by Employer, Employee and WGI on April
9, 1992 and amended effective November 15, 1995 (the "Prior Agreement") if an
initial public offering of WGI's stock pursuant to a registration under the U.S.
Securities Act of 1993, as amended, in an amount not less than U.S.$20,000,000
becomes effective not later than December 31, 1996 (the "1996 IPO"). If the 1996
IPO does not occur, this Agreement shall automatically terminate effective
December 31, 1996, the Prior Agreement shall be deemed to have continued in full
force and effect without interruption and the terms of the Prior Agreement shall
in all instances prevail over the terms of this Agreement. If the 1996 IPO does
occur, the Prior Agreement shall be deemed to have terminated December 31, 1995
and have no further force or effect whatsoever and this Agreement, except as
otherwise provided in Paragraph 9, 10, 12, 14 or 15 below, shall be effective
for the period beginning on January 1, 1996 and ending on December 31, 1998. If
a Change of Control (as defined
<PAGE>
in Paragraph 14(b) below) occurs prior to December 31, 1998, Employee shall be
entitled to the severance payments specified in Paragraph 14 unless Employee and
Employer enter into a mutually acceptable employment agreement providing for the
employment of Employee (including appropriate incentive compensation
arrangements on terms not less favorable to Employee than those which apply to
calendar year 1998 pursuant to Paragraph 5 below) during the three (3) year
period commencing on January 1, 1999.
3. Duties. Employee shall serve as the Executive Vice President,
------
Treasurer and Chief Financial Officer of Employer, subject at all times to the
direction of Employer's Board of Directors, and shall fulfill the duties
customarily incident to such position in the pipeline and related facility
construction and engineering industry. Employee shall devote substantially all
of his business time and attention and his best efforts to the performance of
his duties hereunder. The foregoing notwithstanding, Employer and Employee
recognize and agree that Employee may engage in passive personal investments,
the performance of business or managerial duties generally consistent with those
currently being performed by Employee in connection with such investments and
such other business activities as do not conflict with the business and affairs
of Employer or interfere with Employee's performance of his duties hereunder.
4. Compensation. As compensation for the performance by Employee
------------
of the duties specified herein, Employee shall be paid as follows during
the term of this Agreement:
(a) Employee shall receive an annual base salary equal to
Employee's total annual base salary currently in effect with his present
Willbros employer ("Base Salary"), payable in equal semi-monthly
installments. Employer's Board of Directors shall review such Base Salary
at least annually and may increase, but not decrease, such Base Salary at
any time, taking into account performance, experience, economic
circumstances and other relevant factors. Employee's Base Salary shall
not at any time be less than Employee's total annual Base Salary
currently in effect with his present Willbros employer, adjusted for cost
of living increases.
(b) Subject to Paragraph 5 below, Employee may receive bonuses
at the discretion of the Board of Directors of Employer at any time.
(c) All salary and bonus payments to Employee shall be subject
to normal payroll withholding tax deductions.
5. Incentive Plan. Employee shall be eligible to participate in
--------------
that certain Willbros USA, Inc. Management Incentive Plan dated January
1, 1996 (as the same may be amended from time to time, the "Incentive Plan")
during calendar years 1996 through 1998.
2
<PAGE>
6. Other Employment Benefits. Employee shall be entitled to
-------------------------
participate in any group insurance or other employee benefit plan generally
available to other executives of Employer, upon terms generally applicable to
other executives of Employer or upon such other terms as Employer may determine,
provided that such different terms are not less favorable to Employee.
7. Expenses. In addition to the compensation described in Paragraphs
--------
4 and 5 above, Employee shall be entitled to reimbursement of Employee's
actual out-of-pocket expenses incurred in the conduct of Employer's business,
all of which expenses shall be limited to ordinary and necessary items and
shall be supported by vouchers, receipts or similar documentation to the
extent practicable and required by law.
8. Vacations. Employee shall be entitled to an annual vacation
---------
with pay, in accordance with Employer's policies generally applicable to
its executives, at such times as will not unduly interfere with or hamper
the operation of Employer's business.
9. Confidentiality. Employee covenants and agrees that, during
---------------
and for a period of two (2) years after termination of Employee's employment
with Employer, Employee shall not furnish, disclose or make accessible to
any person, entity or governmental authority, any knowledge or information,
trade secrets, customer information or lists, supplier information or lists,
plans, devices, material or financial or other information with respect to
the business of Willbros or any secret, confidential or sensitive research
or development work, promotions, ideas, opportunities, business plans or designs
relating to the business of Willbros, except as may be necessary in the
furtherance and conduct of Willbros' business and except as may otherwise
be required by law. The prohibitions of this Paragraph 9 shall not apply,
however, to information in the public domain (but only if the same becomes
part of the public domain through a means other than a disclosure prohibited
hereunder). The provisions of this Paragraph 9 shall survive expiration
or termination of this Agreement.
10. Non-Competition. In the event Employee voluntarily terminates
---------------
his employment hereunder or retires during the term of this Agreement,
Employer may, by written notice provided to Employee on or before the effective
date of Employee's termination, elect to require Employee to comply with
the non-competition provisions of this Paragraph 10. If Employer provides
such notice, Employee, for a period of two (2) years from the date of his
termination or retirement, will not compete, directly or indirectly, with
the businesses being conducted by Willbros on the date of such termination
or retirement in the countries where Willbros is then conducting business,
and Employer will pay Employee on the first business day of each month during
such two (2) year non-compete period an amount equal to one twenty-fourth
(1/24) of Employee's annual Base Salary in effect on Employee's date of
termination or retirement. Such payments shall be regarded solely as
consideration for Employee's compliance with the requirements of this Paragraph
10 and shall not constitute salary or severance pay. Notwithstanding the
foregoing, if Employer requires Employee to comply with the non-competition
provisions hereof, Employee shall
3
<PAGE>
not be prohibited from owning (other than in a managerial capacity) up to ten
percent (10%) of the publicly traded stock of a corporation trading on a
recognized securities exchange or in an over-the-counter market, which
corporation is in competition with Willbros. It is expressly understood and
agreed that Employer and Employee consider the restrictions contained in this
Paragraph 10 to be reasonable and necessary for the purposes of preserving and
protecting the goodwill and proprietary information of Employer. The provisions
of this Paragraph 10 shall survive expiration or termination of this Agreement.
11. Benefits and Remedies.
---------------------
(a) The benefits of Paragraphs 9 and 10 above shall flow to
and be enforceable by Employer and any of its Affiliates (as defined in
Paragraph 11(d) below) and their respective successors and assigns. The
parties hereto recognize that, because of the nature of the subject
matter of Paragraphs 9 and 10 above, it would be impractical and
extremely difficult to determine Employer's or its Affiliates' actual
damages in the event of a breach of any of such provisions. Accordingly,
if Employee commits a breach, or threatens to commit a breach, of
Paragraph 9 or 10 above, Employer shall give Employee written notice of
such violation and, if Employee does not cure such violation or otherwise
cease to act in violation of the applicable Paragraph within ten (10)
days of the giving of such notice (provided that the curing of such
violation shall not prevent Employer or any of its Affiliates or any of
their successors or assigns from seeking recovery of their respective
actual damages resulting from such violation), Employer or any of its
Affiliates or any of their successors or assigns shall have the right to
have the provisions of said Paragraph 9 or 10, as applicable,
specifically enforced, by injunctive or other equitable relief, by any
court having equity jurisdiction, it being acknowledged and agreed by
Employee that any such breach or threatened breach will cause irreparable
injury to Employer or its Affiliates and that an injunction may be issued
against Employee to stop or prevent any such breach or threatened breach.
In the event that an action shall be instituted to specifically enforce
Employee's obligations hereunder, Employee shall, to the fullest extent
permitted by applicable law, waive the defense that Employer and its
Affiliates have an adequate remedy at law and shall interpose no
opposition, legal or otherwise, as to the propriety of pursuing specific
performance as a remedy and shall not request any bonding for the
issuance of the relief sought.
(b) Each of the rights and remedies enumerated in Paragraph 11(a)
above shall be independent of the others, and shall be severally
enforceable, and all such rights and remedies shall be in addition to,
and not in lieu of, any other rights and remedies available to Employer
and its Affiliates and their respective successors and assigns under law
or in equity or pursuant to any other agreement binding upon the parties.
4
<PAGE>
(c) In any action at law or equity to enforce any of the provisions
or rights under Paragraph 9 or 10 above, the unsuccessful party to such
litigation, as determined by the court in a final judgment or decree,
shall pay the successful party or parties all costs, expenses and
reasonable attorneys' fees and disbursements incurred therein by such
party or parties (including without limitation such costs, expenses and
fees on any appeals), and if such successful party or parties shall obtain
a judgment in any such action or proceeding, such costs, expenses and
attorneys' fees shall be included as part of such judgment.
(d) For purposes of this Paragraph 11, the term "Affiliate"
with respect to Employer, shall mean any other person or entity directly
or indirectly controlling, controlled by or under direct or indirect
common control with Employer.
12. Termination. This Agreement may be terminated prior to December
-----------
31, 1998 as follows:
(a) Upon Employee's death, in which case the Base Salary and,
except as provided in the Incentive Plan, all other rights and benefits
to which Employee is entitled hereunder shall be prorated through the
end of the month in which Employee's death occurs.
(b) By Employer, at its sole option, immediately upon written
notice to Employee, for cause. "Cause" for termination shall be limited
to one or more of the following:
(i) Proven or admitted theft, embezzlement or the
perpetration of any criminal fraud by Employee against Willbros
in connection with his employment with Willbros;
(ii) The intentional misappropriation by Employee, for
his own personal benefit, of any material corporate opportunity,
without having first offered such corporate opportunity to Willbros
or obtained other authorization by Willbros; or
(iii) The intentional commission of any felonious act by
Employee in connection with his employment with Willbros, which
act is known to Employee to be a felonious act and has not been
specifically authorized by Willbros.
Except as otherwise provided in Paragraph 14 below, in the event of
termination of this Agreement for any of the causes enumerated in
this Paragraph 12(b), Employer's obligation, if any, to pay Employee
shall cease immediately.
5
<PAGE>
(c) By Employer, at its sole option, upon the Disability of
Employee. "Disability" for this purpose shall mean total and permanent
incapacity of Employee to perform the usual duties of his employment,
which shall be deemed to exist when certified by a physician who is
mutually acceptable to Employee and Employer. Except as otherwise provided
in Paragraph 14 below, in the event of a termination pursuant to this
Paragraph 12(c), (i) the Base Salary and, except as provided in the
Incentive Plan, all other rights to which Employee is entitled hereunder
shall be prorated through the end of the month in which the effective date
of such termination occurs, and (ii) Employee shall be entitled to such
compensation and benefits as are provided in any long-term disability
insurance policy or certificate covering Employee, if any.
(d) By Employee, at his sole option, upon written notice to
Employer at least five (5) days prior to the effective date of termination
set forth in such notice if a Change of Control (as defined in Paragraph
14(b) below) has occurred and Employee gives notice of termination within
twelve (12) months after the occurrence of such Change of Control. In the
event of termination of this Agreement pursuant to this Paragraph 12(d),
the Base Salary and, except as provided in the Incentive Plan, all other
rights to which Employee is entitled hereunder shall be prorated through
the end of the month in which the effective date of such termination
occurs. In addition, if applicable, Employee shall be entitled to the
payments due under Paragraph 14 below.
(e) By Employee, in the case of Employer's substantial breach
of this Agreement (including without limitation termination by Employer
other than as allowed hereby). If Employee terminates this Agreement
because of Employer's substantial breach of this Agreement, Employee
shall be entitled to receive Employee's Base Salary (as in effect at the
time of the breach) for the remainder of the term of this Agreement (in
which case such sum shall be paid monthly over such period); however, if
Paragraph 14 hereof is applicable at the time of the breach and the
payments under such Paragraph 14 are greater than payments due under this
Paragraph 12(e), Employee may elect to receive the Paragraph 14 payments.
To effect termination by reason of a substantial breach of this Agreement
by Employer, Employee must have given written notice of such breach to
Employer and Employer must have failed to cure such breach within fifteen
(15) days of the date such notice is deemed to have been delivered.
(f) By Employee, for any reason other than those set forth in
Paragraphs 12(a), 12(d) and 12(e) above, upon written notice to Employer
at least thirty (30) days prior to the effective date of termination set
forth in such notice. In the event of a termination of this Agreement
pursuant to this Paragraph 12(f), Employer's obligations to pay Employee,
except as provided in the Incentive Plan, shall cease on the effective
date of such termination.
6
<PAGE>
The termination of this Agreement under this Paragraph 12 shall not affect the
provisions of Paragraph 9, 10, 14 or 15 (to the extent applicable) hereof or
this Paragraph 12, which shall remain in full force and effect for the
applicable time period; provided, however, if Employee rightfully terminates
this Agreement under Paragraph 12(e) above, only the prohibition of Paragraph 9
above shall apply in accordance with its terms and Paragraph 10 above shall not
apply.
13. Miscellaneous.
-------------
(a) Each party bound by this Agreement agrees to perform any
further acts and to execute and deliver any additional documents which
may reasonably be necessary to carry out the provisions of this
Agreement.
(b) This Agreement may not be assigned by either of the parties
hereto without the prior written consent of the other. Subject to the
foregoing, this Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective heirs, legal
representatives, successors and assigns, each of which shall execute such
instruments and take such actions as are necessary or appropriate to
carry out the purposes of this Agreement. Except as provided herein,
nothing in this Agreement, express or implied, is intended or shall be
construed to give to any person other than the parties hereto any right,
remedy or claim under or by reason of this Agreement.
(c) This Agreement, together with the Incentive Plan and the
other employee benefit plans referenced in Paragraph 6 above as the same
may be amended from time to time, constitutes the entire agreement and
understanding between the parties hereto, and supersedes any prior
agreement or correspondence, relating to the subject matter hereof. This
Agreement may be modified or amended only by a written instrument
executed by the parties hereto.
(d) The use of headings and captions herein is solely for the
convenience of the parties hereto and shall not limit or otherwise affect
the construction of any of the terms or provisions hereof.
(e) This Agreement shall be governed by the laws of the State of
New York, U.S.A., without regard to the principles of conflict of laws.
(f) No waiver of any term, provision or condition of this
Agreement shall be effective unless in writing signed by the party
granting the waiver, and no such waiver shall be deemed to be or
construed as a further or continuing waiver of such term, provision or
condition or as a waiver of any other term, provision or condition of
this Agreement, unless specifically so stated in such waiver.
7
<PAGE>
(g) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which together
shall be deemed to be one and the same instrument.
(h) If any covenant or agreement contained herein, or any part
hereof, is held to be unenforceable for any reason, the remainder of this
Agreement shall be construed as if such provision or part thereof was not
included herein; provided, that if the unenforceability of any such
covenant or agreement is because of the breadth of its scope, the
duration of such provision or the geographical area covered thereby, the
parties agree that such provision shall be amended, as determined by the
court, so as to reduce the breadth of the scope or the duration and/or
geographical area of such provision such that, in its reduced form, said
provision shall then be enforceable.
(i) All notices and other communications required or permitted
hereunder shall be in writing, and shall be deemed to have been delivered
on the date delivered by hand, telegram, facsimile, or by similar means,
or on the third (3rd) day following the day when sent by recognized
courier or overnight delivery service (fees prepaid), or on the fifth
(5th) day following the day when deposited in the mail, registered or
certified (postage prepaid), addressed as follows:
If to Employee: Melvin F. Spreitzer
9739 South Jamestown
Tulsa, Oklahoma 74137
U.S.A.
If to Employer: Willbros USA, Inc.
Suite 700, 2431 East 61st Street
Tulsa, Oklahoma 74136
U.S.A.
If to WGI: Willbros Group, Inc.
Edificio Torre Banco Germanico
Calle 50 y 55 Este, Apartado 850048
Panama 5, Republic of Panama
With a copy to: John N. Hove, Esq.
Suite 200, 2431 East 61st Street
Tulsa, Oklahoma 74136
U.S.A.
Either party may change its address for receiving notices by giving written
notice of such change to the other party in accordance with this Paragraph
13(i).
8
<PAGE>
14. Change of Control.
-----------------
(a) If a Change of Control (as defined in Paragraph 14(b) below)
occurs and Employee's employment is terminated for any reason (whether
voluntarily or involuntarily) within twelve (12) months of such Change of
Control, Employee shall be entitled to elect to receive a severance
payment equal to the sum of (i) three (3) times his Base Salary; (ii)
three (3) times the average incentive payment earned under the Incentive
Plan (or a similar predecessor incentive plan) for the three (3) full
calendar years preceding his termination of employment; and (iii) the
Special Retirement Benefit (as defined in paragraph 14(d) below).
(b) The term "Change of Control" means and will be deemed to have
occurred if (i) any person, other than WGI or a Related Party, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended), directly or indirectly, of
securities of WGI representing twenty (20%) or more of the total voting
power of all the then outstanding voting securities of WGI ("Voting
Securities"); or (ii) any person, other than WGI or a Related Party,
purchases or otherwise acquires, under a tender offer, securities
representing, when combined with other securities of WGI owned by such
person, twenty percent (20%) or more of the total voting power of all the
then outstanding Voting Securities; or (iii) the individuals (A) who as of
the date hereof constitute the Board of Directors of WGI (the "Board") or
(B) who hereafter are elected to the Board and whose election, or
nomination for election, to the Board was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors as of the date hereof or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority of the members of the Board; or (iv) the stockholders of WGI
approve a merger, consolidation, recapitalization or reorganization of WGI
or an acquisition of securities or assets by WGI, or consummation of any
such transaction if stockholder approval is not obtained (other than any
such transaction which would result in the Voting Securities outstanding
immediately prior thereto continuing to represent, either by remaining
outstanding or by being converted into voting securities of the surviving
entity, at least eighty percent (80%) of the total voting power
represented by the voting securities of the surviving entity outstanding
immediately after such transaction and in or as a result of which the
voting rights of each Voting Security relative to the voting rights of all
other Voting Securities are not altered); or (v) the stockholders of WGI
approve a plan of complete liquidation of WGI, or an agreement for the
sale or disposition by WGI of all or substantially all of WGI's assets,
other than any such transaction which would result in a Related Party
owning or acquiring more than fifty percent (50%) of the assets owned by
WGI immediately prior to the transaction; or (vi) the Board adopts a
resolution to the effect that a Change of Control has occurred and the
transaction giving rise to such resolution has been approved by the
stockholders of WGI or been consummated if such approval is not sought.
9
<PAGE>
(c) The term "Related Party" means (i) a majority owned direct or
indirect subsidiary of WGI, (ii) an employee or group of employees of WGI
or of any majority owned direct or indirect subsidiary of WGI, (iii) a
trustee or other fiduciary holding securities under an employee benefit
plan of WGI or any majority owned direct or indirect subsidiary of WGI,
(iv) a corporation owned directly or indirectly by the stockholders of WGI
in substantially the same proportion as their ownership of stock of WGI,
(v) Heerema Holding Construction, Inc., or (vi) Yorktown Energy Partners,
L.P.
(d) The term "Special Retirement Benefit" means an amount calculated
such that, when added to any benefits payable to the Employee under the
Willbros USA, Inc. Pension Plan (the "Pension Plan") and the Willbros
Group, Inc. Executive Benefit Restoration Plan (collectively, the "Other
Retirement Benefits"), the total retirement benefits the Employee receives
from the Employer will at least equal the amount which the aggregate of
the Other Retirement Benefits would have been if the Employee retired on a
date three (3) years following the date of his employment termination and
the Percentage of Early Pension Payable (as described in the Pension Plan)
was calculated using a discount percent per year not exceeding one and
one-half percent (1 1/2%) from age sixty-five. For purposes of
calculating the Special Retirement Benefit and the Other Retirement
Benefits under this Agreement, the following will apply:
(i) The Employee will be deemed to have continued his employment
for a three (3) year period beginning on the date of his termination
at his base salary in effect on the date of termination; and
(ii) The Employee will be deemed to have received compensation
under the Incentive Plan (or a similar predecessor incentive plan)
for each year of such three (3) year period in an amount equal to
the average annual incentive payment earned under the Incentive Plan
for the three (3) full calendar years preceding his termination of
employment.
(e) The provisions of this Paragraph 14 shall survive expiration
or termination of this Agreement.
15. Tax Gross-Up Payments.
---------------------
(a) The parties recognize that the payments under this Agreement,
including without limitation, payments under Paragraph 14 above, and other
compensation, benefits, payments and distributions under the Incentive
Plan or other plans or compensation arrangements with respect to Employee
may be subject to the excise tax imposed under Section 4999 of the U.S.
Internal Revenue
10
<PAGE>
Code of 1986 (as amended, the "Code"). In such event, Employer will pay
Employee one or more cash payments ("Gross-up Payment") sufficient to pay
such excise tax, together with any interest or penalties incurred by
Employee relative thereto and any federal and state excise or income taxes
resulting from payments made pursuant to this Paragraph 15 (collectively,
the "Excise Tax").
(b) Subject to the provisions of Paragraph 15(c) hereof, all
determinations required to be made under this Paragraph 15, including
without limitation whether the Gross-up Payment is required and the amount
of the Gross-up Payment, will be made by an accounting firm selected by
Employee and approved by Employer, which approval will not be unreasonably
withheld. Employee will provide the accounting firm any information
reasonably requested by it necessary to make such determination, including
without limitation copies of Employee's tax returns for the periods
affected, all of which will be maintained in confidence by the accounting
firm. The accounting firm will provide detailed supporting calculations
together with its written opinion with respect to the accuracy of such
calculations to Employer and Employee within fifteen (15) business days of
the date of termination of Employee's employment or such earlier time as
is requested by Employee or Employer and agreed to by the accounting firm.
All fees and expenses of the accounting firm will be borne solely by
Employer. The initial Gross-up Payment, if any, as determined pursuant to
this Paragraph 15(b), will be paid to Employee within five (5) days after
Employee's receipt of the accounting firm's determination. If the
accounting firm determines that no Excise Tax is payable by Employee, it
will also furnish Employee with an opinion that failure to report the
Excise Tax on Employee's applicable federal income tax return would not
result in the imposition of a negligence or similar penalty. In the
absence of such an opinion, a Gross-up Payment in the amount which the
accounting firm determines to be payable will be due and payable to
Employee. Except as provided in the preceding sentence, any determination
by the accounting firm will be binding upon all of the parties hereto. As
a result of uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the accounting firm hereunder, it
is possible that Gross-up Payments which will not have been made by
Employer should have been made, consistent with the calculations required
to be made hereunder (the "Underpayment"). In the event that Employer
exhausts the remedies provided in Paragraph 15(c) hereof and Employee
thereafter is required to make a payment of any Excise Tax, the accounting
firm will determine the amount of the Underpayment that has occurred and
any such Underpayment will be promptly paid by Employer to or for the
benefit of Employee.
(c) Employee will notify Employer in writing of any claim by the U.S.
Internal Revenue Service (the "IRS") that, if successful, would require
the payment by Employer of the Gross-up Payment; provided, that failure by
Employee to give such notification will not affect any of Employee's
rights or the obligations of Employer under this Agreement. Such
notification will be given as soon as
11
<PAGE>
practicable but no later than ten (10) business days after Employee knows
of such claim and will apprise Employer of the nature of such claim and
the date on which such claim is requested to be paid. Employee will not
pay such claim prior to the expiration of the thirty (30) day period
following the date on which Employee gives such notice to Employer (or
such sooner period ending on the date that any payment of taxes with
respect to such claim is due). If Employer notifies Employee in writing
prior to the expiration of such period that it desires to contest such
claim, Employee will:
(i) give Employer any information reasonably requested by
Employer relating to such claim;
(ii) take such action in connection with contesting such
claim as Employer may reasonably request in writing from time to
time, including without limitation accepting legal representation
with respect to such claim by an attorney reasonably selected by
Employer;
(iii) cooperate with Employer in good faith in order
effectively to contest such claim; and
(iv) permit Employer to participate in any proceedings
relating to such claim;
provided, however, that Employer will bear and pay directly all costs and
expenses (including without limitation additional interest and penalties)
incurred in connection with such contest and will indemnify and hold
Employee harmless, on an after-tax basis, for any Excise Tax or income
tax, including without limitation interest and penalties with respect
thereto, imposed as a result of such representation, and payment of costs
and expenses. Without limiting the foregoing, Employer will control all
proceedings taken in connection with such contest and, at the sole option
of Employer, may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect
of such claim and may, at its sole option, either direct Employee to pay
the tax claimed and sue for a refund or contest the claim in any
permissible manner, and Employee will prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as Employer may
determine; provided, however, that if Employer directs Employee to pay
such claim and sue for a refund, Employer will advance the amount of such
payment to Employee, on an interest-free basis, and will indemnify and
hold Employee harmless, on an after-tax basis, from any Excise Tax,
including without limitation interest or penalties with respect thereto,
imposed with respect to such advance or with respect to any imputed income
with respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable
year of Employee with respect to which such contested amount is claimed to
be due
12
<PAGE>
is limited solely to such contested amount. Furthermore, the control of
the contest by Employer will be limited to issues with respect to which a
Gross-up Payment would be payable hereunder and Employee will be entitled
to settle or contest, as the case may be, any other issue raised by the
IRS or any other taxing authority.
(d) If, after the receipt by Employee of an amount advanced by
Employer pursuant to Paragraph 15(c) hereof, Employee becomes entitled to
receive any refund with respect to such claim, Employee will (subject to
compliance by Employer with the requirements of Paragraph 15(c) hereof)
promptly pay to Employer the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If,
after the receipt by Employee of an amount advanced by Employer pursuant
to Paragraph 15(c) hereof, a determination is made that Employee will not
be entitled to any refund with respect to such claim and Employer does not
notify Employee in writing of its intent to contest such denial of refund
prior to the expiration of thirty (30) calendar days after such
determination, then such advance will be forgiven and will not be required
to be repaid and the amount of such advance will offset, to the extent
thereof, the amount of Gross-up Payment required to be paid. Any contest
of a denial of refund will be controlled by Paragraph 15(c) hereof.
(e) The provisions of this Paragraph 15 shall survive expiration or
termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed, or have caused to be
executed, this Employment Agreement on the day and year first set forth above.
"Employer"
WILLBROS USA, INC.
By: /s/Larry J. Bump
-------------------------------
Name: Larry J. Bump
-----------------------------
Title: President, Chief Executive
----------------------------
Officer and Chief Operating
----------------------------
Officer
----------------------------
"Employee"
/s/Melvin F. Spreitzer
-------------------------------
13
<PAGE>
WILLBROS GROUP, INC.
By: /s/Larry J. Bump
--------------------------------
Name: Larry J. Bump
------------------------------
Title: President, Chief Executive
-----------------------------
Officer and Chief Operating
-----------------------------
Officer
-----------------------------
14
<PAGE>
EXHIBIT 10.5
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered
into as of the 1st day of January, 1996, by and among Willbros USA, Inc.
("Employer"), a Delaware, U.S.A. corporation; Gary L. Bracken ("Employee");
and Willbros Group, Inc. ("WGI"), a Republic of Panama corporation.
RECITALS
--------
A. Employee is currently a Senior Vice President of Employer.
B. Employer is, indirectly, a wholly owned subsidiary of WGI.
C. Employee is one of the senior executives of a group of companies
comprised of WGI and its subsidiaries, including Employer (collectively,
"Willbros").
D. Employer and Employee wish to establish conditions and incentives
for the continuation of Employee's employment with Employer.
E. WGI expects to derive, indirectly, substantial benefit from
the continuation of Employee's employment with Employer.
NOW, THEREFORE, in consideration of the above recitals and the mutual
convenants herein contained, the parties hereto, intending to be legally
bound, agree as follows:
1. Employment. Employer hereby employs Employee, and Employee hereby
----------
accepts employment with Employer, upon the terms and conditions hereinafter
set forth.
2. Term. This Agreement is intended to supersede and replace that
certain Employment Agreement entered into by Employer, Employee and WGI on April
9, 1992 and amended effective November 15, 1995 (the "Prior Agreement") if an
initial public offering of WGI's stock pursuant to a registration under the U.S.
Securities Act of 1993, as amended, in an amount not less than U.S.$20,000,000
becomes effective not later than December 31, 1996 (the "1996 IPO"). If the 1996
IPO does not occur, this Agreement shall automatically terminate effective
December 31, 1996, the Prior Agreement shall be deemed to have continued in full
force and effect without interruption and the terms of the Prior Agreement shall
in all instances prevail over the terms of this Agreement. If the 1996 IPO does
occur, the Prior Agreement shall be deemed to have terminated December 31, 1995
and have no further force or effect whatsoever and this Agreement, except as
otherwise provided in Paragraph 9, 10, 12, 14 or 15 below, shall be effective
for the period beginning on January 1, 1996 and ending on December 31, 1998. If
a Change of Control (as defined in Paragraph 14(b) below) occurs prior to
December 31, 1998, Employee shall be entitled
<PAGE>
to the severance payments specified in Paragraph 14 unless Employee and
Employer enter into a mutually acceptable employment agreement providing
for the employment of Employee (including appropriate incentive compensation
arrangements on terms not less favorable to Employee than those which apply
to calendar year 1998 pursuant to Paragraph 5 below) during the three (3)
year period commencing on January 1, 1999.
3. Duties. Employee shall serve as a Senior Vice President of Employer,
------
subject at all times to the direction of Employer's Board of Directors,
and shall fulfill the duties customarily incident to such position in the
pipeline and related facility construction and engineering industry. Employee
shall devote substantially all of his business time and attention and his
best efforts to the performance of his duties hereunder. The foregoing
notwithstanding, Employer and Employee recognize and agree that Employee
may engage in passive personal investments, the performance of business
or managerial duties generally consistent with those currently being performed
by Employee in connection with such investments and such other business
activities as do not conflict with the business and affairs of Employer or
interfere with Employee's performance of his duties hereunder.
4. Compensation. As compensation for the performance by Employee
------------
of the duties specified herein, Employee shall be paid as follows during
the term of this Agreement:
(a) Employee shall receive an annual base salary equal to
Employee's total annual base salary currently in effect with his present
Willbros employer ("Base Salary"), payable in equal semi-monthly
installments. Employer's Board of Directors shall review such Base Salary
at least annually and may increase, but not decrease, such Base Salary at
any time, taking into account performance, experience, economic
circumstances and other relevant factors. Employee's Base Salary shall
not at any time be less than Employee's total annual Base Salary
currently in effect with his present Willbros employer, adjusted for cost
of living increases.
(b) Subject to Paragraph 5 below, Employee may receive bonuses
at the discretion of the Board of Directors of Employer at any time.
(c) All salary and bonus payments to Employee shall be subject
to normal payroll withholding tax deductions.
5. Incentive Plan. Employee shall be eligible to participate in
--------------
that certain Willbros USA, Inc. Management Incentive Plan dated January
1, 1996 (as the same may be amended from time to time, the "Incentive Plan")
during calendar years 1996 through 1998.
6. Other Employment Benefits. Employee shall be entitled to
-------------------------
participate in any group insurance or other employee benefit plan generally
available to other executives of Employer, upon terms generally applicable
to other executives of Employer or upon such
2
<PAGE>
other terms as Employer may determine, provided that such different terms
are not less favorable to Employee.
7. Expenses. In addition to the compensation described in Paragraphs
--------
4 and 5 above, Employee shall be entitled to reimbursement of Employee's
actual out-of-pocket expenses incurred in the conduct of Employer's business,
all of which expenses shall be limited to ordinary and necessary items and
shall be supported by vouchers, receipts or similar documentation to the
extent practicable and required by law.
8. Vacations. Employee shall be entitled to an annual vacation
---------
with pay, in accordance with Employer's policies generally applicable to
its executives, at such times as will not unduly interfere with or hamper
the operation of Employer's business.
9. Confidentiality. Employee covenants and agrees that, during
---------------
and for a period of two (2) years after termination of Employee's employment
with Employer, Employee shall not furnish, disclose or make accessible to
any person, entity or governmental authority, any knowledge or information,
trade secrets, customer information or lists, supplier information or lists,
plans, devices, material or financial or other information with respect to
the business of Willbros or any secret, confidential or sensitive research
or development work, promotions, ideas, opportunities, business plans or designs
relating to the business of Willbros, except as may be necessary in the
furtherance and conduct of Willbros' business and except as may otherwise
be required by law. The prohibitions of this Paragraph 9 shall not apply,
however, to information in the public domain (but only if the same becomes
part of the public domain through a means other than a disclosure prohibited
hereunder). The provisions of this Paragraph 9 shall survive expiration
or termination of this Agreement.
10. Non-Competition. In the event Employee voluntarily terminates
---------------
his employment hereunder or retires during the term of this Agreement,
Employer may, by written notice provided to Employee on or before the effective
date of Employee's termination, elect to require Employee to comply with
the non-competition provisions of this Paragraph 10. If Employer provides
such notice, Employee, for a period of two (2) years from the date of his
termination or retirement, will not compete, directly or indirectly, with
the businesses being conducted by Willbros on the date of such termination
or retirement in the countries where Willbros is then conducting business,
and Employer will pay Employee on the first business day of each month during
such two (2) year non-compete period an amount equal to one twenty-fourth
(1/24) of Employee's annual Base Salary in effect on Employee's date of
termination or retirement. Such payments shall be regarded solely as
consideration for Employee's compliance with the requirements of this Paragraph
10 and shall not constitute salary or severance pay. Notwithstanding the
foregoing, if Employer requires Employee to comply with the non-competition
provisions hereof, Employee shall not be prohibited from owning (other than in
a managerial capacity) up to ten percent (10%) of the publicly traded stock of
a corporation trading on a recognized securities exchange or in an over-the-
counter market, which corporation is in competition with Willbros. It is
3
<PAGE>
expressly understood and agreed that Employer and Employee consider the
restrictions contained in this Paragraph 10 to be reasonable and necessary
for the purposes of preserving and protecting the goodwill and proprietary
information of Employer. The provisions of this Paragraph 10 shall survive
expiration or termination of this Agreement.
11. Benefits and Remedies.
---------------------
(a) The benefits of Paragraphs 9 and 10 above shall flow to
and be enforceable by Employer and any of its Affiliates (as defined in
Paragraph 11(d) below) and their respective successors and assigns. The
parties hereto recognize that, because of the nature of the subject
matter of Paragraphs 9 and 10 above, it would be impractical and
extremely difficult to determine Employer's or its Affiliates' actual
damages in the event of a breach of any of such provisions. Accordingly,
if Employee commits a breach, or threatens to commit a breach, of
Paragraph 9 or 10 above, Employer shall give Employee written notice of
such violation and, if Employee does not cure such violation or otherwise
cease to act in violation of the applicable Paragraph within ten (10)
days of the giving of such notice (provided that the curing of such
violation shall not prevent Employer or any of its Affiliates or any of
their successors or assigns from seeking recovery of their respective
actual damages resulting from such violation), Employer or any of its
Affiliates or any of their successors or assigns shall have the right to
have the provisions of said Paragraph 9 or 10, as applicable,
specifically enforced, by injunctive or other equitable relief, by any
court having equity jurisdiction, it being acknowledged and agreed by
Employee that any such breach or threatened breach will cause irreparable
injury to Employer or its Affiliates and that an injunction may be issued
against Employee to stop or prevent any such breach or threatened breach.
In the event that an action shall be instituted to specifically enforce
Employee's obligations hereunder, Employee shall, to the fullest extent
permitted by applicable law, waive the defense that Employer and its
Affiliates have an adequate remedy at law and shall interpose no
opposition, legal or otherwise, as to the propriety of pursuing specific
performance as a remedy and shall not request any bonding for the
issuance of the relief sought.
(b) Each of the rights and remedies enumerated in Paragraph 11(a)
above shall be independent of the others, and shall be severally
enforceable, and all such rights and remedies shall be in addition to,
and not in lieu of, any other rights and remedies available to Employer
and its Affiliates and their respective successors and assigns under law
or in equity or pursuant to any other agreement binding upon the parties.
(c) In any action at law or equity to enforce any of the provisions
or rights under Paragraph 9 or 10 above, the unsuccessful party to such
litigation, as determined by the court in a final judgment or decree,
shall pay the successful party or parties all costs, expenses and
reasonable attorneys' fees and disbursements
4
<PAGE>
incurred therein by such party or parties (including without limitation
such costs, expenses and fees on any appeals), and if such successful
party or parties shall obtain a judgment in any such action or
proceeding, such costs, expenses and attorneys' fees shall be included as
part of such judgment.
(d) For purposes of this Paragraph 11, the term "Affiliate"
with respect to Employer, shall mean any other person or entity directly
or indirectly controlling, controlled by or under direct or indirect
common control with Employer.
12. Termination. This Agreement may be terminated prior to December
-----------
31, 1998 as follows:
(a) Upon Employee's death, in which case the Base Salary and,
except as provided in the Incentive Plan, all other rights and benefits
to which Employee is entitled hereunder shall be prorated through the
end of the month in which Employee's death occurs.
(b) By Employer, at its sole option, immediately upon written
notice to Employee, for cause. "Cause" for termination shall be limited
to one or more of the following:
(i) Proven or admitted theft, embezzlement or the
perpetration of any criminal fraud by Employee against Willbros
in connection with his employment with Willbros;
(ii) The intentional misappropriation by Employee, for
his own personal benefit, of any material corporate opportunity,
without having first offered such corporate opportunity to Willbros
or obtained other authorization by Willbros; or
(iii) The intentional commission of any felonious act by
Employee in connection with his employment with Willbros, which
act is known to Employee to be a felonious act and has not been
specifically authorized by Willbros.
Except as otherwise provided in Paragraph 14 below, in the event of
termination of this Agreement for any of the causes enumerated in
this Paragraph 12(b), Employer's obligation, if any, to pay Employee
shall cease immediately.
(c) By Employer, at its sole option, upon the Disability of
Employee. "Disability" for this purpose shall mean total and permanent
incapacity of Employee to perform the usual duties of his employment,
which shall be deemed to exist when certified by a physician who is
mutually acceptable to Employee and Employer. Except as otherwise
provided in Paragraph 14 below, in the event of a termination
5
<PAGE>
pursuant to this Paragraph 12(c), (i) the Base Salary and, except as
provided in the Incentive Plan, all other rights to which Employee is
entitled hereunder shall be prorated through the end of the month in
which the effective date of such termination occurs, and (ii) Employee
shall be entitled to such compensation and benefits as are provided in
any long-term disability insurance policy or certificate covering
Employee, if any.
(d) By Employee, at his sole option, upon written notice to
Employer at least five (5) days prior to the effective date of termination
set forth in such notice if a Change of Control (as defined in Paragraph
14(b) below) has occurred and Employee gives notice of termination within
twelve (12) months after the occurrence of such Change of Control. In the
event of termination of this Agreement pursuant to this Paragraph 12(d),
the Base Salary and, except as provided in the Incentive Plan, all other
rights to which Employee is entitled hereunder shall be prorated through
the end of the month in which the effective date of such termination
occurs. In addition, if applicable, Employee shall be entitled to the
payments due under Paragraph 14 below.
(e) By Employee, in the case of Employer's substantial breach
of this Agreement (including without limitation termination by Employer
other than as allowed hereby). If Employee terminates this Agreement
because of Employer's substantial breach of this Agreement, Employee
shall be entitled to receive Employee's Base Salary (as in effect at the
time of the breach) for the remainder of the term of this Agreement (in
which case such sum shall be paid monthly over such period); however, if
Paragraph 14 hereof is applicable at the time of the breach and the
payments under such Paragraph 14 are greater than payments due under this
Paragraph 12(e), Employee may elect to receive the Paragraph 14 payments.
To effect termination by reason of a substantial breach of this Agreement
by Employer, Employee must have given written notice of such breach to
Employer and Employer must have failed to cure such breach within fifteen
(15) days of the date such notice is deemed to have been delivered.
(f) By Employee, for any reason other than those set forth in
Paragraphs 12(a), 12(d) and 12(e) above, upon written notice to Employer
at least thirty (30) days prior to the effective date of termination set
forth in such notice. In the event of a termination of this Agreement
pursuant to this Paragraph 12(f), Employer's obligations to pay Employee,
except as provided in the Incentive Plan, shall cease on the effective
date of such termination.
The termination of this Agreement under this Paragraph 12 shall not affect the
provisions of Paragraph 9, 10, 14 or 15 (to the extent applicable) hereof or
this Paragraph 12, which shall remain in full force and effect for the
applicable time period; provided, however, if Employee rightfully terminates
this Agreement under Paragraph 12(e) above, only the
6
<PAGE>
prohibition of Paragraph 9 above shall apply in accordance with its terms
and Paragraph 10 above shall not apply.
13. Miscellaneous.
-------------
(a) Each party bound by this Agreement agrees to perform any
further acts and to execute and deliver any additional documents which
may reasonably be necessary to carry out the provisions of this
Agreement.
(b) This Agreement may not be assigned by either of the parties
hereto without the prior written consent of the other. Subject to the
foregoing, this Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective heirs, legal
representatives, successors and assigns, each of which shall execute such
instruments and take such actions as are necessary or appropriate to
carry out the purposes of this Agreement. Except as provided herein,
nothing in this Agreement, express or implied, is intended or shall be
construed to give to any person other than the parties hereto any right,
remedy or claim under or by reason of this Agreement.
(c) This Agreement, together with the Incentive Plan and the
other employee benefit plans referenced in Paragraph 6 above as the same
may be amended from time to time, constitutes the entire agreement and
understanding between the parties hereto, and supersedes any prior
agreement or correspondence, relating to the subject matter hereof. This
Agreement may be modified or amended only by a written instrument
executed by the parties hereto.
(d) The use of headings and captions herein is solely for the
convenience of the parties hereto and shall not limit or otherwise affect
the construction of any of the terms or provisions hereof.
(e) This Agreement shall be governed by the laws of the State of
New York, U.S.A., without regard to the principles of conflict of laws.
(f) No waiver of any term, provision or condition of this
Agreement shall be effective unless in writing signed by the party
granting the waiver, and no such waiver shall be deemed to be or
construed as a further or continuing waiver of such term, provision or
condition or as a waiver of any other term, provision or condition of
this Agreement, unless specifically so stated in such waiver.
(g) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which together
shall be deemed to be one and the same instrument.
7
<PAGE>
(h) If any covenant or agreement contained herein, or any part
hereof, is held to be unenforceable for any reason, the remainder of this
Agreement shall be construed as if such provision or part thereof was not
included herein; provided, that if the unenforceability of any such
covenant or agreement is because of the breadth of its scope, the
duration of such provision or the geographical area covered thereby, the
parties agree that such provision shall be amended, as determined by the
court, so as to reduce the breadth of the scope or the duration and/or
geographical area of such provision such that, in its reduced form, said
provision shall then be enforceable.
(i) All notices and other communications required or permitted
hereunder shall be in writing, and shall be deemed to have been delivered
on the date delivered by hand, telegram, facsimile, or by similar means,
or on the third (3rd) day following the day when sent by recognized
courier or overnight delivery service (fees prepaid), or on the fifth
(5th) day following the day when deposited in the mail, registered or
certified (postage prepaid), addressed as follows:
If to Employee: Gary L. Bracken
1617 East 30th Place
Tulsa, Oklahoma 74114
U.S.A.
If to Employer: Willbros USA, Inc.
Suite 700, 2431 East 61st Street
Tulsa, Oklahoma 74136
U.S.A.
If to WGI: Willbros Group, Inc.
Edificio Torre Banco Germanico
Calle 50 y 55 Este, Apartado 850048
Panama 5, Republic of Panama
With a copy to: John N. Hove, Esq.
Suite 200, 2431 East 61st Street
Tulsa, Oklahoma 74136
U.S.A.
Either party may change its address for receiving notices by giving written
notice of such change to the other party in accordance with this Paragraph
13(i).
8
<PAGE>
14. Change of Control.
-----------------
(a) If a Change of Control (as defined in Paragraph 14(b) below)
occurs and Employee's employment is terminated for any reason (whether
voluntarily or involuntarily) within twelve (12) months of such Change of
Control, Employee shall be entitled to elect to receive a severance
payment equal to the sum of (i) three (3) times his Base Salary; (ii)
three (3) times the average incentive payment earned under the Incentive
Plan (or a similar predecessor incentive plan) for the three (3) full
calendar years preceding his termination of employment; and (iii) the
Special Retirement Benefit (as defined in paragraph 14(d) below).
(b) The term "Change of Control" means and will be deemed to have
occurred if (i) any person, other than WGI or a Related Party, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended), directly or indirectly, of
securities of WGI representing twenty (20%) or more of the total voting
power of all the then outstanding voting securities of WGI ("Voting
Securities"); or (ii) any person, other than WGI or a Related Party,
purchases or otherwise acquires, under a tender offer, securities
representing, when combined with other securities of WGI owned by such
person, twenty percent (20%) or more of the total voting power of all the
then outstanding Voting Securities; or (iii) the individuals (A) who as of
the date hereof constitute the Board of Directors of WGI (the "Board") or
(B) who hereafter are elected to the Board and whose election, or
nomination for election, to the Board was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors as of the date hereof or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority of the members of the Board; or (iv) the stockholders of WGI
approve a merger, consolidation, recapitalization or reorganization of WGI
or an acquisition of securities or assets by WGI, or consummation of any
such transaction if stockholder approval is not obtained (other than any
such transaction which would result in the Voting Securities outstanding
immediately prior thereto continuing to represent, either by remaining
outstanding or by being converted into voting securities of the surviving
entity, at least eighty percent (80%) of the total voting power
represented by the voting securities of the surviving entity outstanding
immediately after such transaction and in or as a result of which the
voting rights of each Voting Security relative to the voting rights of all
other Voting Securities are not altered); or (v) the stockholders of WGI
approve a plan of complete liquidation of WGI, or an agreement for the
sale or disposition by WGI of all or substantially all of WGI's assets,
other than any such transaction which would result in a Related Party
owning or acquiring more than fifty percent (50%) of the assets owned by
WGI immediately prior to the transaction; or (vi) the Board adopts a
resolution to the effect that a Change of Control has occurred and the
transaction giving rise to such resolution has been approved by the
stockholders of WGI or been consummated if such approval is not sought.
9
<PAGE>
(c) The term "Related Party" means (i) a majority owned direct or
indirect subsidiary of WGI, (ii) an employee or group of employees of WGI
or of any majority owned direct or indirect subsidiary of WGI, (iii) a
trustee or other fiduciary holding securities under an employee benefit
plan of WGI or any majority owned direct or indirect subsidiary of WGI,
(iv) a corporation owned directly or indirectly by the stockholders of WGI
in substantially the same proportion as their ownership of stock of WGI,
(v) Heerema Holding Construction, Inc., or (vi) Yorktown Energy Partners,
L.P.
(d) The term "Special Retirement Benefit" means an amount
calculated such that, when added to any benefits payable to the Employee
under the Willbros USA, Inc. Pension Plan (the "Pension Plan") and the
Willbros Group, Inc. Executive Benefit Restoration Plan (collectively, the
"Other Retirement Benefits"), the total retirement benefits the Employee
receives from the Employer will at least equal the amount which the
aggregate of the Other Retirement Benefits would have been if the Employee
retired on a date three (3) years following the date of his employment
termination and the Percentage of Early Pension Payable (as described in
the Pension Plan) was calculated using a discount percent per year not
exceeding one and one-half percent (1 1/2%) from age sixty-five. For
purposes of calculating the Special Retirement Benefit and the Other
Retirement Benefits under this Agreement, the following will apply:
(i) The Employee will be deemed to have continued his
employment for a three (3) year period beginning on the date of his
termination at his basesalary in effect on the date of termination;
and
(ii) The Employee will be deemed to have received compensation
under the Incentive Plan (or a similar predecessor incentive plan)
for each year of such three (3) year period in an amount equal to
the average annual incentive payment earned under the Incentive
Plan for the three (3) full calendar years preceding his
termination of employment.
(e) The provisions of this Paragraph 14 shall survive expiration or
termination of this Agreement.
15. Tax Gross-Up Payments.
---------------------
(a) The parties recognize that the payments under this Agreement,
including without limitation, payments under Paragraph 14 above, and other
compensation, benefits, payments and distributions under the Incentive
Plan or other plans or compensation arrangements with respect to Employee
may be subject to the excise tax imposed under Section 4999 of the U.S.
Internal Revenue
10
<PAGE>
Code of 1986 (as amended, the "Code"). In such event, Employer will pay
Employee one or more cash payments ("Gross-up Payment") sufficient to
pay such excise tax, together with any interest or penalties incurred by
Employee relative thereto and any federal and state excise or income
taxes resulting from payments made pursuant to this Paragraph 15
(collectively, the "Excise Tax").
(b) Subject to the provisions of Paragraph 15(c) hereof, all
determinations required to be made under this Paragraph 15, including
without limitation whether the Gross-up Payment is required and the
amount of the Gross-up Payment, will be made by an accounting firm
selected by Employee and approved by Employer, which approval will not
be unreasonably withheld. Employee will provide the accounting firm any
information reasonably requested by it necessary to make such
determination, including without limitation copies of Employee's tax
returns for the periods affected, all of which will be maintained in
confidence by the accounting firm. The accounting firm will provide
detailed supporting calculations together with its written opinion with
respect to the accuracy of such calculations to Employer and Employee
within fifteen (15) business days of the date of termination of
Employee's employment or such earlier time as is requested by Employee
or Employer and agreed to by the accounting firm. All fees and expenses
of the accounting firm will be borne solely by Employer. The initial
Gross-up Payment, if any, as determined pursuant to this Paragraph
15(b), will be paid to Employee within five (5) days after Employee's
receipt of the accounting firm's determination. If the accounting firm
determines that no Excise Tax is payable by Employee, it will also
furnish Employee with an opinion that failure to report the Excise Tax
on Employee's applicable federal income tax return would not result in
the imposition of a negligence or similar penalty. In the absence of
such an opinion, a Gross-up Payment in the amount which the accounting
firm determines to be payable will be due and payable to Employee.
Except as provided in the preceding sentence, any determination by the
accounting firm will be binding upon all of the parties hereto. As a
result of uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the accounting firm hereunder,
it is possible that Gross-up Payments which will not have been made by
Employer should have been made, consistent with the calculations
required to be made hereunder (the "Underpayment"). In the event that
Employer exhausts the remedies provided in Paragraph 15(c) hereof and
Employee thereafter is required to make a payment of any Excise Tax, the
accounting firm will determine the amount of the Underpayment that has
occurred and any such Underpayment will be promptly paid by Employer to
or for the benefit of Employee.
(c) Employee will notify Employer in writing of any claim by the
U.S. Internal Revenue Service (the "IRS") that, if successful, would
require the payment by Employer of the Gross-up Payment; provided, that
failure by Employee to give such notification will not affect any of
Employee's rights or the obligations of Employer under this Agreement.
Such notification will be given as soon as
11
<PAGE>
practicable but no later than ten (10) business days after Employee
knows of such claim and will apprise Employer of the nature of such
claim and the date on which such claim is requested to be paid. Employee
will not pay such claim prior to the expiration of the thirty (30) day
period following the date on which Employee gives such notice to
Employer (or such sooner period ending on the date that any payment of
taxes with respect to such claim is due). If Employer notifies Employee
in writing prior to the expiration of such period that it desires to
contest such claim, Employee will:
(i) give Employer any information reasonably
requested by Employer relating to such claim;
(ii) take such action in connection with contesting
such claim as Employer may reasonably request in writing
from time to time, including without limitation accepting
legal representation with respect to such claim by an
attorney reasonably selected by Employer;
(iii) cooperate with Employer in good faith in order
effectively to contest such claim; and
(iv) permit Employer to participate in any
proceedings relating to such claim;
provided, however, that Employer will bear and pay directly all costs
and expenses (including without limitation additional interest and
penalties) incurred in connection with such contest and will indemnify
and hold Employee harmless, on an after-tax basis, for any Excise Tax or
income tax, including without limitation interest and penalties with
respect thereto, imposed as a result of such representation, and payment
of costs and expenses. Without limiting the foregoing, Employer will
control all proceedings taken in connection with such contest and, at
the sole option of Employer, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option,
either direct Employee to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and Employee will prosecute
such contest to a determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more appellate courts, as
Employer may determine; provided, however, that if Employer directs
Employee to pay such claim and sue for a refund, Employer will advance
the amount of such payment to Employee, on an interest-free basis, and
will indemnify and hold Employee harmless, on an after-tax basis, from
any Excise Tax, including without limitation interest or penalties with
respect thereto, imposed with respect to such advance or with respect to
any imputed income with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of
taxes for the taxable year of Employee with respect to which such
contested amount is claimed to be due
12
<PAGE>
is limited solely to such contested amount. Furthermore, the control of
the contest by Employer will be limited to issues with respect to which
a Gross-up Payment would be payable hereunder and Employee will be
entitled to settle or contest, as the case may be, any other issue
raised by the IRS or any other taxing authority.
(d) If, after the receipt by Employee of an amount advanced by
Employer pursuant to Paragraph 15(c) hereof, Employee becomes entitled
to receive any refund with respect to such claim, Employee will (subject
to compliance by Employer with the requirements of Paragraph 15(c)
hereof) promptly pay to Employer the amount of such refund (together
with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by Employee of an amount advanced by
Employer pursuant to Paragraph 15(c) hereof, a determination is made
that Employee will not be entitled to any refund with respect to such
claim and Employer does not notify Employee in writing of its intent to
contest such denial of refund prior to the expiration of thirty (30)
calendar days after such determination, then such advance will be
forgiven and will not be required to be repaid and the amount of such
advance will offset, to the extent thereof, the amount of Gross-up
Payment required to be paid. Any contest of a denial of refund will be
controlled by Paragraph 15(c) hereof.
(e) The provisions of this Paragraph 15 shall survive expiration
or termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed, or have caused to
be executed, this Employment Agreement on the day and year first set forth
above.
"Employer"
WILLBROS USA, INC.
By: /s/ Larry J. Bump
------------------------------------
Name: Larry J. Bump
----------------------------------
Title: President, Chief Executive Officer
--------------------------------
and Chief Operating Officer
"Employee"
/s/ Gary L. Bracken
---------------------------------------
13
<PAGE>
WILLBROS GROUP, INC.
By: /s/ Larry J. Bump
-----------------------------------
Name: Larry J. Bump
---------------------------------
Title: President, Chief Executive
--------------------------------
Officer and Chief Operating
Officer
14
<PAGE>
EXHIBIT 10.6
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered
into as of the 1st day of January, 1996, by and among Willbros USA, Inc.
("Employer"), a Delaware, U.S.A. corporation; M. Kieth Phillips ("Employee");
and Willbros Group, Inc. ("WGI"), a Republic of Panama corporation.
RECITALS
--------
A. Employee is currently a Senior Vice President of Employer.
B. Employer is, indirectly, a wholly owned subsidiary of WGI.
C. Employee is one of the senior executives of a group of companies
comprised of WGI and its subsidiaries, including Employer (collectively,
"Willbros").
D. Employer and Employee wish to establish conditions and incentives
for the continuation of Employee's employment with Employer.
E. WGI expects to derive, indirectly, substantial benefit from
the continuation of Employee's employment with Employer.
NOW, THEREFORE, in consideration of the above recitals and the mutual
convenants herein contained, the parties hereto, intending to be legally
bound, agree as follows:
1. Employment. Employer hereby employs Employee, and Employee hereby
----------
accepts employment with Employer, upon the terms and conditions hereinafter
set forth.
2. Term. This Agreement is intended to supersede and replace that
----
certain Employment Agreement entered into by Employer, Employee and WGI on April
9, 1992 and amended effective November 15, 1995 (the "Prior Agreement") if an
initial public offering of WGI's stock pursuant to a registration under the U.S.
Securities Act of 1993, as amended, in an amount not less than U.S.$20,000,000
becomes effective not later than December 31, 1996 (the "1996 IPO"). If the 1996
IPO does not occur, this Agreement shall automatically terminate effective
December 31, 1996, the Prior Agreement shall be deemed to have continued in full
force and effect without interruption and the terms of the Prior Agreement shall
in all instances prevail over the terms of this Agreement. If the 1996 IPO does
occur, the Prior Agreement shall be deemed to have terminated December 31, 1995
and have no further force or effect whatsoever and this Agreement, except as
otherwise provided in Paragraph 9, 10, 12, 14 or 15 below, shall be effective
for the period beginning on January 1, 1996 and ending on December 31, 1998. If
a Change of Control (as defined in Paragraph 14(b) below) occurs prior to
December 31, 1998, Employee shall be entitled
<PAGE>
to the severance payments specified in Paragraph 14 unless Employee and
Employer enter into a mutually acceptable employment agreement providing
for the employment of Employee (including appropriate incentive compensation
arrangements on terms not less favorable to Employee than those which apply
to calendar year 1998 pursuant to Paragraph 5 below) during the three (3)
year period commencing on January 1, 1999.
3. Duties. Employee shall serve as a Senior Vice President of Employer,
------
subject at all times to the direction of Employer's Board of Directors,
and shall fulfill the duties customarily incident to such position in the
pipeline and related facility construction and engineering industry. Employee
shall devote substantially all of his business time and attention and his
best efforts to the performance of his duties hereunder. The foregoing
notwithstanding, Employer and Employee recognize and agree that Employee
may engage in passive personal investments, the performance of business
or managerial duties generally consistent with those currently being performed
by Employee in connection with such investments and such other business
activities as do not conflict with the business and affairs of Employer or
interfere with Employee's performance of his duties hereunder.
4. Compensation. As compensation for the performance by Employee
------------
of the duties specified herein, Employee shall be paid as follows during
the term of this Agreement:
(a) Employee shall receive an annual base salary equal to
Employee's total annual base salary currently in effect with his present
Willbros employer ("Base Salary"), payable in equal semi-monthly
installments. Employer's Board of Directors shall review such Base Salary
at least annually and may increase, but not decrease, such Base Salary at
any time, taking into account performance, experience, economic
circumstances and other relevant factors. Employee's Base Salary shall
not at any time be less than Employee's total annual Base Salary
currently in effect with his present Willbros employer, adjusted for cost
of living increases.
(b) Subject to Paragraph 5 below, Employee may receive bonuses
at the discretion of the Board of Directors of Employer at any time.
(c) All salary and bonus payments to Employee shall be subject
to normal payroll withholding tax deductions.
5. Incentive Plan. Employee shall be eligible to participate in
--------------
that certain Willbros USA, Inc. Management Incentive Plan dated January
1, 1996 (as the same may be amended from time to time, the "Incentive Plan")
during calendar years 1996 through 1998.
6. Other Employment Benefits. Employee shall be entitled to
-------------------------
participate in any group insurance or other employee benefit plan generally
available to other executives of Employer, upon terms generally applicable
to other executives of Employer or upon such
2
<PAGE>
other terms as Employer may determine, provided that such different terms
are not less favorable to Employee.
7. Expenses. In addition to the compensation described in Paragraphs
--------
4 and 5 above, Employee shall be entitled to reimbursement of Employee's
actual out-of-pocket expenses incurred in the conduct of Employer's business,
all of which expenses shall be limited to ordinary and necessary items and
shall be supported by vouchers, receipts or similar documentation to the
extent practicable and required by law.
8. Vacations. Employee shall be entitled to an annual vacation
---------
with pay, in accordance with Employer's policies generally applicable to
its executives, at such times as will not unduly interfere with or hamper
the operation of Employer's business.
9. Confidentiality. Employee covenants and agrees that, during
---------------
and for a period of two (2) years after termination of Employee's employment
with Employer, Employee shall not furnish, disclose or make accessible to
any person, entity or governmental authority, any knowledge or information,
trade secrets, customer information or lists, supplier information or lists,
plans, devices, material or financial or other information with respect to
the business of Willbros or any secret, confidential or sensitive research
or development work, promotions, ideas, opportunities, business plans or designs
relating to the business of Willbros, except as may be necessary in the
furtherance and conduct of Willbros' business and except as may otherwise
be required by law. The prohibitions of this Paragraph 9 shall not apply,
however, to information in the public domain (but only if the same becomes
part of the public domain through a means other than a disclosure prohibited
hereunder). The provisions of this Paragraph 9 shall survive expiration
or termination of this Agreement.
10. Non-Competition. In the event Employee voluntarily terminates
---------------
his employment hereunder or retires during the term of this Agreement,
Employer may, by written notice provided to Employee on or before the effective
date of Employee's termination, elect to require Employee to comply with
the non-competition provisions of this Paragraph 10. If Employer provides
such notice, Employee, for a period of two (2) years from the date of his
termination or retirement, will not compete, directly or indirectly, with
the businesses being conducted by Willbros on the date of such termination
or retirement in the countries where Willbros is then conducting business,
and Employer will pay Employee on the first business day of each month during
such two (2) year non-compete period an amount equal to one twenty-fourth
(1/24) of Employee's annual Base Salary in effect on Employee's date of
termination or retirement. Such payments shall be regarded solely as
consideration for Employee's compliance with the requirements of this Paragraph
10 and shall not constitute salary or severance pay. Notwithstanding the
foregoing, if Employer requires Employee to comply with the non-competition
provisions hereof, Employee shall not be prohibited from owning (other than in
a managerial capacity) up to ten percent (10%) of the publicly traded stock of
a corporation trading on a recognized securities exchange or in an over-the-
counter market, which corporation is in competition with Willbros. It is
3
<PAGE>
expressly understood and agreed that Employer and Employee consider the
restrictions contained in this Paragraph 10 to be reasonable and necessary
for the purposes of preserving and protecting the goodwill and proprietary
information of Employer. The provisions of this Paragraph 10 shall survive
expiration or termination of this Agreement.
11. Benefits and Remedies.
---------------------
(a) The benefits of Paragraphs 9 and 10 above shall flow to
and be enforceable by Employer and any of its Affiliates (as defined in
Paragraph 11(d) below) and their respective successors and assigns. The
parties hereto recognize that, because of the nature of the subject
matter of Paragraphs 9 and 10 above, it would be impractical and
extremely difficult to determine Employer's or its Affiliates' actual
damages in the event of a breach of any of such provisions. Accordingly,
if Employee commits a breach, or threatens to commit a breach, of
Paragraph 9 or 10 above, Employer shall give Employee written notice of
such violation and, if Employee does not cure such violation or otherwise
cease to act in violation of the applicable Paragraph within ten (10)
days of the giving of such notice (provided that the curing of such
violation shall not prevent Employer or any of its Affiliates or any of
their successors or assigns from seeking recovery of their respective
actual damages resulting from such violation), Employer or any of its
Affiliates or any of their successors or assigns shall have the right to
have the provisions of said Paragraph 9 or 10, as applicable,
specifically enforced, by injunctive or other equitable relief, by any
court having equity jurisdiction, it being acknowledged and agreed by
Employee that any such breach or threatened breach will cause irreparable
injury to Employer or its Affiliates and that an injunction may be issued
against Employee to stop or prevent any such breach or threatened breach.
In the event that an action shall be instituted to specifically enforce
Employee's obligations hereunder, Employee shall, to the fullest extent
permitted by applicable law, waive the defense that Employer and its
Affiliates have an adequate remedy at law and shall interpose no
opposition, legal or otherwise, as to the propriety of pursuing specific
performance as a remedy and shall not request any bonding for the
issuance of the relief sought.
(b) Each of the rights and remedies enumerated in Paragraph 11(a)
above shall be independent of the others, and shall be severally
enforceable, and all such rights and remedies shall be in addition to,
and not in lieu of, any other rights and remedies available to Employer
and its Affiliates and their respective successors and assigns under law
or in equity or pursuant to any other agreement binding upon the parties.
(c) In any action at law or equity to enforce any of the provisions
or rights under Paragraph 9 or 10 above, the unsuccessful party to such
litigation, as determined by the court in a final judgment or decree,
shall pay the successful party or parties all costs, expenses and
reasonable attorneys' fees and disbursements
4
<PAGE>
incurred therein by such party or parties (including without limitation
such costs, expenses and fees on any appeals), and if such successful
party or parties shall obtain a judgment in any such action or
proceeding, such costs, expenses and attorneys' fees shall be included as
part of such judgment.
(d) For purposes of this Paragraph 11, the term "Affiliate"
with respect to Employer, shall mean any other person or entity directly
or indirectly controlling, controlled by or under direct or indirect
common control with Employer.
12. Termination. This Agreement may be terminated prior to December
-----------
31, 1998 as follows:
(a) Upon Employee's death, in which case the Base Salary and,
except as provided in the Incentive Plan, all other rights and benefits
to which Employee is entitled hereunder shall be prorated through the
end of the month in which Employee's death occurs.
(b) By Employer, at its sole option, immediately upon written
notice to Employee, for cause. "Cause" for termination shall be limited
to one or more of the following:
(i) Proven or admitted theft, embezzlement or the
perpetration of any criminal fraud by Employee against Willbros
in connection with his employment with Willbros;
(ii) The intentional misappropriation by Employee, for
his own personal benefit, of any material corporate opportunity,
without having first offered such corporate opportunity to Willbros
or obtained other authorization by Willbros; or
(iii) The intentional commission of any felonious act by
Employee in connection with his employment with Willbros, which
act is known to Employee to be a felonious act and has not been
specifically authorized by Willbros.
Except as otherwise provided in Paragraph 14 below, in the event of
termination of this Agreement for any of the causes enumerated in
this Paragraph 12(b), Employer's obligation, if any, to pay Employee
shall cease immediately.
(c) By Employer, at its sole option, upon the Disability of
Employee. "Disability" for this purpose shall mean total and permanent
incapacity of Employee to perform the usual duties of his employment,
which shall be deemed to exist when certified by a physician who is
mutually acceptable to Employee and Employer. Except as otherwise
provided in Paragraph 14 below, in the event of a termination
5
<PAGE>
pursuant to this Paragraph 12(c), (i) the Base Salary and, except as
provided in the Incentive Plan, all other rights to which Employee is
entitled hereunder shall be prorated through the end of the month in
which the effective date of such termination occurs, and (ii) Employee
shall be entitled to such compensation and benefits as are provided in
any long-term disability insurance policy or certificate covering
Employee, if any.
(d) By Employee, at his sole option, upon written notice to
Employer at least five (5) days prior to the effective date of termination
set forth in such notice if a Change of Control (as defined in Paragraph
14(b) below) has occurred and Employee gives notice of termination within
twelve (12) months after the occurrence of such Change of Control. In the
event of termination of this Agreement pursuant to this Paragraph 12(d),
the Base Salary and, except as provided in the Incentive Plan, all other
rights to which Employee is entitled hereunder shall be prorated through
the end of the month in which the effective date of such termination
occurs. In addition, if applicable, Employee shall be entitled to the
payments due under Paragraph 14 below.
(e) By Employee, in the case of Employer's substantial breach
of this Agreement (including without limitation termination by Employer
other than as allowed hereby). If Employee terminates this Agreement
because of Employer's substantial breach of this Agreement, Employee
shall be entitled to receive Employee's Base Salary (as in effect at the
time of the breach) for the remainder of the term of this Agreement (in
which case such sum shall be paid monthly over such period); however, if
Paragraph 14 hereof is applicable at the time of the breach and the
payments under such Paragraph 14 are greater than payments due under this
Paragraph 12(e), Employee may elect to receive the Paragraph 14 payments.
To effect termination by reason of a substantial breach of this Agreement
by Employer, Employee must have given written notice of such breach to
Employer and Employer must have failed to cure such breach within fifteen
(15) days of the date such notice is deemed to have been delivered.
(f) By Employee, for any reason other than those set forth in
Paragraphs 12(a), 12(d) and 12(e) above, upon written notice to Employer
at least thirty (30) days prior to the effective date of termination set
forth in such notice. In the event of a termination of this Agreement
pursuant to this Paragraph 12(f), Employer's obligations to pay Employee,
except as provided in the Incentive Plan, shall cease on the effective
date of such termination.
The termination of this Agreement under this Paragraph 12 shall not affect the
provisions of Paragraph 9, 10, 14 or 15 (to the extent applicable) hereof or
this Paragraph 12, which shall remain in full force and effect for the
applicable time period; provided, however, if Employee rightfully terminates
this Agreement under Paragraph 12(e) above, only the
6
<PAGE>
prohibition of Paragraph 9 above shall apply in accordance with its terms
and Paragraph 10 above shall not apply.
13. Miscellaneous.
-------------
(a) Each party bound by this Agreement agrees to perform any
further acts and to execute and deliver any additional documents which
may reasonably be necessary to carry out the provisions of this
Agreement.
(b) This Agreement may not be assigned by either of the parties
hereto without the prior written consent of the other. Subject to the
foregoing, this Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective heirs, legal
representatives, successors and assigns, each of which shall execute such
instruments and take such actions as are necessary or appropriate to
carry out the purposes of this Agreement. Except as provided herein,
nothing in this Agreement, express or implied, is intended or shall be
construed to give to any person other than the parties hereto any right,
remedy or claim under or by reason of this Agreement.
(c) This Agreement, together with the Incentive Plan and the
other employee benefit plans referenced in Paragraph 6 above as the same
may be amended from time to time, constitutes the entire agreement and
understanding between the parties hereto, and supersedes any prior
agreement or correspondence, relating to the subject matter hereof. This
Agreement may be modified or amended only by a written instrument
executed by the parties hereto.
(d) The use of headings and captions herein is solely for the
convenience of the parties hereto and shall not limit or otherwise affect
the construction of any of the terms or provisions hereof.
(e) This Agreement shall be governed by the laws of the State of
New York, U.S.A., without regard to the principles of conflict of laws.
(f) No waiver of any term, provision or condition of this
Agreement shall be effective unless in writing signed by the party
granting the waiver, and no such waiver shall be deemed to be or
construed as a further or continuing waiver of such term, provision or
condition or as a waiver of any other term, provision or condition of
this Agreement, unless specifically so stated in such waiver.
(g) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which together
shall be deemed to be one and the same instrument.
7
<PAGE>
(h) If any covenant or agreement contained herein, or any part
hereof, is held to be unenforceable for any reason, the remainder of this
Agreement shall be construed as if such provision or part thereof was not
included herein; provided, that if the unenforceability of any such
covenant or agreement is because of the breadth of its scope, the
duration of such provision or the geographical area covered thereby, the
parties agree that such provision shall be amended, as determined by the
court, so as to reduce the breadth of the scope or the duration and/or
geographical area of such provision such that, in its reduced form, said
provision shall then be enforceable.
(i) All notices and other communications required or permitted
hereunder shall be in writing, and shall be deemed to have been delivered
on the date delivered by hand, telegram, facsimile, or by similar means,
or on the third (3rd) day following the day when sent by recognized
courier or overnight delivery service (fees prepaid), or on the fifth
(5th) day following the day when deposited in the mail, registered or
certified (postage prepaid), addressed as follows:
If to Employee: M. Kieth Phillips
7707 South Oswego Place
Tulsa, Oklahoma 74136
U.S.A.
If to Employer: Willbros USA, Inc.
Suite 700, 2431 East 61st Street
Tulsa, Oklahoma 74136
U.S.A.
If to WGI: Willbros Group, Inc.
Edificio Torre Banco Germanico
Calle 50 y 55 Este, Apartado 850048
Panama 5, Republic of Panama
With a copy to: John N. Hove, Esq.
Suite 200, 2431 East 61st Street
Tulsa, Oklahoma 74136
U.S.A.
Either party may change its address for receiving notices by giving written
notice of such change to the other party in accordance with this Paragraph
13(i).
8
<PAGE>
14. Change of Control.
-----------------
(a) If a Change of Control (as defined in Paragraph 14(b) below)
occurs and Employee's employment is terminated for any reason (whether
voluntarily or involuntarily) within twelve (12) months of such Change of
Control, Employee shall be entitled to elect to receive a severance
payment equal to the sum of (i) three (3) times his Base Salary; (ii)
three (3) times the average incentive payment earned under the Incentive
Plan (or a similar predecessor incentive plan) for the three (3) full
calendar years preceding his termination of employment; and (iii) the
Special Retirement Benefit (as defined in paragraph 14(d) below).
(b) The term "Change of Control" means and will be deemed to have
occurred if (i) any person, other than WGI or a Related Party, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended), directly or indirectly, of
securities of WGI representing twenty (20%) or more of the total voting
power of all the then outstanding voting securities of WGI ("Voting
Securities"); or (ii) any person, other than WGI or a Related Party,
purchases or otherwise acquires, under a tender offer, securities
representing, when combined with other securities of WGI owned by such
person, twenty percent (20%) or more of the total voting power of all the
then outstanding Voting Securities; or (iii) the individuals (A) who as of
the date hereof constitute the Board of Directors of WGI (the "Board") or
(B) who hereafter are elected to the Board and whose election, or
nomination for election, to the Board was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors as of the date hereof or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority of the members of the Board; or (iv) the stockholders of WGI
approve a merger, consolidation, recapitalization or reorganization of
WGI or an acquisition of securities or assets by WGI, or consummation of
any such transaction if stockholder approval is not obtained (other than
any such transaction which would result in the Voting Securities
outstanding immediately prior thereto continuing to represent, either by
remaining outstanding or by being converted into voting securities of the
surviving entity, at least eighty percent (80%) of the total voting power
represented by the voting securities of the surviving entity outstanding
immediately after such transaction and in or as a result of which the
voting rights of each Voting Security relative to the voting rights of
all other Voting Securities are not altered); or (v) the stockholders of
WGI approve a plan of complete liquidation of WGI, or an agreement for
the sale or disposition by WGI of all or substantially all of WGI's
assets, other than any such transaction which would result in a Related
Party owning or acquiring more than fifty percent (50%) of the assets
owned by WGI immediately prior to the transaction; or (vi) the Board
adopts a resolution to the effect that a Change of Control has occurred
and the transaction giving rise to such resolution has been approved by
the stockholders of WGI or been consummated if such approval is not
sought.
9
<PAGE>
(c) The term "Related Party" means (i) a majority owned direct or
indirect subsidiary of WGI, (ii) an employee or group of employees of WGI
or of any majority owned direct or indirect subsidiary of WGI, (iii) a
trustee or other fiduciary holding securities under an employee benefit
plan of WGI or any majority owned direct or indirect subsidiary of WGI,
(iv) a corporation owned directly or indirectly by the stockholders of
WGI in substantially the same proportion as their ownership of stock of
WGI, (v) Heerema Holding Construction, Inc., or (vi) Yorktown Energy
Partners, L.P.
(d) The term "Special Retirement Benefit" means an amount
calculated such that, when added to any benefits payable to the Employee
under the Willbros USA, Inc. Pension Plan (the "Pension Plan") and the
Willbros Group, Inc. Executive Benefit Restoration Plan (collectively,
the "Other Retirement Benefits"), the total retirement benefits the
Employee receives from the Employer will at least equal the amount which
the aggregate of the Other Retirement Benefits would have been if the
Employee retired on a date three (3) years following the date of his
employment termination and the Percentage of Early Pension Payable (as
described in the Pension Plan) was calculated using a discount percent
per year not exceeding one and one-half percent (1 1/2%) from age
sixty-five. For purposes of calculating the Special Retirement Benefit
and the Other Retirement Benefits under this Agreement, the following
will apply:
(i) The Employee will be deemed to have continued his
employment for a three (3) year period beginning on the date
of his termination at his base salary in effect on the date of
termination; and
(ii) The Employee will be deemed to have received compensation
under the Incentive Plan (or a similar predecessor incentive
plan) for each year of such three (3) year period in an amount
equal to the average annual incentive payment earned under the
Incentive Plan for the three (3) full calendar years preceding
his termination of employment.
(e) The provisions of this Paragraph 14 shall survive expiration or
termination of this Agreement.
15. Tax Gross-Up Payments.
---------------------
(a) The parties recognize that the payments under this Agreement,
including without limitation, payments under Paragraph 14 above, and
other compensation, benefits, payments and distributions under the
Incentive Plan or other plans or compensation arrangements with respect
to Employee may be subject to the excise tax imposed under Section 4999
of the U.S. Internal Revenue
10
<PAGE>
Code of 1986 (as amended, the "Code"). In such event, Employer will pay
Employee one or more cash payments ("Gross-up Payment") sufficient to pay
such excise tax, together with any interest or penalties incurred by
Employee relative thereto and any federal and state excise or income
taxes resulting from payments made pursuant to this Paragraph 15
(collectively, the "Excise Tax").
(b) Subject to the provisions of Paragraph 15(c) hereof, all
determinations required to be made under this Paragraph 15, including
without limitation whether the Gross-up Payment is required and the
amount of the Gross-up Payment, will be made by an accounting firm
selected by Employee and approved by Employer, which approval will not be
unreasonably withheld. Employee will provide the accounting firm any
information reasonably requested by it necessary to make such
determination, including without limitation copies of Employee's tax
returns for the periods affected, all of which will be maintained in
confidence by the accounting firm. The accounting firm will provide
detailed supporting calculations together with its written opinion with
respect to the accuracy of such calculations to Employer and Employee
within fifteen (15) business days of the date of termination of
Employee's employment or such earlier time as is requested by Employee or
Employer and agreed to by the accounting firm. All fees and expenses of
the accounting firm will be borne solely by Employer. The initial
Gross-up Payment, if any, as determined pursuant to this Paragraph 15(b),
will be paid to Employee within five (5) days after Employee's receipt of
the accounting firm's determination. If the accounting firm determines
that no Excise Tax is payable by Employee, it will also furnish Employee
with an opinion that failure to report the Excise Tax on Employee's
applicable federal income tax return would not result in the imposition
of a negligence or similar penalty. In the absence of such an opinion, a
Gross-up Payment in the amount which the accounting firm determines to be
payable will be due and payable to Employee. Except as provided in the
preceding sentence, any determination by the accounting firm will be
binding upon all of the parties hereto. As a result of uncertainty in
the application of Section 4999 of the Code at the time of the initial
determination by the accounting firm hereunder, it is possible that
Gross-up Payments which will not have been made by Employer should have
been made, consistent with the calculations required to be made hereunder
(the "Underpayment"). In the event that Employer exhausts the remedies
provided in Paragraph 15(c) hereof and Employee thereafter is required to
make a payment of any Excise Tax, the accounting firm will determine the
amount of the Underpayment that has occurred and any such Underpayment
will be promptly paid by Employer to or for the benefit of Employee.
(c) Employee will notify Employer in writing of any claim by the
U.S. Internal Revenue Service (the "IRS") that, if successful, would
require the payment by Employer of the Gross-up Payment; provided, that
failure by Employee to give such notification will not affect any of
Employee's rights or the obligations of Employer under this Agreement.
Such notification will be given as soon as
11
<PAGE>
practicable but no later than ten (10) business days after Employee knows
of such claim and will apprise Employer of the nature of such claim and
the date on which such claim is requested to be paid. Employee will not
pay such claim prior to the expiration of the thirty (30) day period
following the date on which Employee gives such notice to Employer (or
such sooner period ending on the date that any payment of taxes with
respect to such claim is due). If Employer notifies Employee in writing
prior to the expiration of such period that it desires to contest such
claim, Employee will:
(i) give Employer any information reasonably requested by
Employer relating to such claim;
(ii) take such action in connection with contesting such claim
as Employer may reasonably request in writing from time to
time, including without limitation accepting legal
representation with respect to such claim by an attorney
reasonably selected by Employer;
(iii) cooperate with Employer in good faith in order
effectively to contest such claim; and
(iv) permit Employer to participate in any proceedings
relating to such claim;
provided, however, that Employer will bear and pay directly all costs and
expenses (including without limitation additional interest and penalties)
incurred in connection with such contest and will indemnify and hold
Employee harmless, on an after-tax basis, for any Excise Tax or income
tax, including without limitation interest and penalties with respect
thereto, imposed as a result of such representation, and payment of costs
and expenses. Without limiting the foregoing, Employer will control all
proceedings taken in connection with such contest and, at the sole option
of Employer, may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct Employee
to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and Employee will prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as Employer may
determine; provided, however, that if Employer directs Employee to pay
such claim and sue for a refund, Employer will advance the amount of such
payment to Employee, on an interest-free basis, and will indemnify and
hold Employee harmless, on an after-tax basis, from any Excise Tax,
including without limitation interest or penalties with respect thereto,
imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of taxes for
the taxable year of Employee with respect to which such contested amount
is claimed to be due
12
<PAGE>
is limited solely to such contested amount. Furthermore, the control of
the contest by Employer will be limited to issues with respect to which a
Gross-up Payment would be payable hereunder and Employee will be entitled
to settle or contest, as the case may be, any other issue raised by the
IRS or any other taxing authority.
(d) If, after the receipt by Employee of an amount advanced by
Employer pursuant to Paragraph 15(c) hereof, Employee becomes entitled to
receive any refund with respect to such claim, Employee will (subject to
compliance by Employer with the requirements of Paragraph 15(c) hereof)
promptly pay to Employer the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If,
after the receipt by Employee of an amount advanced by Employer pursuant
to Paragraph 15(c) hereof, a determination is made that Employee will not
be entitled to any refund with respect to such claim and Employer does
not notify Employee in writing of its intent to contest such denial of
refund prior to the expiration of thirty (30) calendar days after such
determination, then such advance will be forgiven and will not be
required to be repaid and the amount of such advance will offset, to the
extent thereof, the amount of Gross-up Payment required to be paid. Any
contest of a denial of refund will be controlled by Paragraph 15(c)
hereof.
(e) The provisions of this Paragraph 15 shall survive expiration
or termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed, or have caused to
be executed, this Employment Agreement on the day and year first set forth
above.
"Employer"
WILLBROS USA, INC.
By: /s/ Larry J. Bump
--------------------------------------
Name: Larry J. Bump
------------------------------------
Title: President, Chief Executive Officer
-----------------------------------
and Chief Operating Officer
"Employee"
/s/ M. Kieth Phillips
-----------------------------
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<PAGE>
WILLBROS GROUP, INC.
By: /s/ Larry J. Bump
-------------------------------------
Name: Larry J. Bump
-----------------------------------
Title: President, Chief Executive Officer
-----------------------------------
and Chief Operating Officer
-----------------------------------
14
<PAGE>
EXHIBIT 10.15
STOCK PURCHASE AGREEMENT
------------------------
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered into
this 9th day of April, 1992, in the City of Geneva, Switzerland, by and between
WILLBROS ACQUISITION CORP., a Republic of Panama corporation ("Buyer"); and
HEEREMA HOLDING CONSTRUCTION, INC., a Republic of Panama corporation ("Seller").
RECITALS
--------
A. Willbros Group, Inc., a Republic of Panama corporation ("WGI"), is a
wholly-owned subsidiary of Seller.
B. WGI, through its direct and indirect subsidiaries, is engaged in the
business of pipeline and related facility construction and engineering within
and outside the United States.
C. Buyer is owned by certain executives and employees of WGI and its
subsidiaries and other investors.
D. Seller desires to sell and Buyer desires to purchase all of the issued
and outstanding capital stock of WGI, on the terms and subject to the conditions
set forth herein.
NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants contained herein, Buyer and Seller hereby agree as follows:
1. DEFINITIONS. Unless the context otherwise requires, when used in this
-----------
Agreement, the following terms shall have the meanings assigned to them in this
Section 1:
"Balance Sheet" shall mean the audited consolidated balance sheet of
WGI and its subsidiaries as of the Balance Sheet Date.
"Balance Sheet Date" shall mean December 31, 1991.
"Closing" shall mean consummation of the transactions described in
this Agreement.
"Closing Date" shall mean that date, not later than April 10, 1992, on
which the condition set forth in Section 7(f) below has been satisfied, or
such other date as may be mutually agreed between Buyer and Seller,
provided that the other conditions set forth in Sections 7 and 8 hereof
have been satisfied.
"Effective Date" shall mean January 1, 1992.
"Monastere" shall mean Monastere Inc., a Delaware corporation which is
a wholly-owned subsidiary of WUSAI.
<PAGE>
"Monastere Shares" shall mean all of the issued and outstanding shares
of capital stock of Monastere.
"Musketeer" shall mean Musketeer Oil B.V., a Netherlands corporation
which is a wholly-owned subsidiary of Vintondale.
"Note and Warrant Purchase Agreement" shall mean that certain Note and
Warrant Purchase Agreement of even date herewith between Buyer and certain
investors (including Seller) who are purchasing subordinated notes of Buyer
and warrants to purchase preferred stock of Buyer.
"Preferred Stock Purchase Agreement" shall mean that certain Preferred
Stock Purchase Agreement of even date herewith between Buyer and certain
investors (including Seller) who are making equity investments in Buyer.
"Vessel MWB" shall mean Vessel MWB 403, Inc., a Delaware corporation
which is a wholly-owned subsidiary of WUSAI.
"Vessel MWB Shares" shall mean all of the issued and outstanding
shares of capital stock of Vessel MWB.
"Vintondale" shall mean Vintondale Corporation N.V., a Netherlands
Antilles corporation which is a wholly-owned subsidiary of WGI.
"WARL" shall mean Willbros Al-Rushaid Limited, a Saudi Arabian limited
liability company in which WII owns a forty-nine percent (49%) equity
interest.
"WESCO" shall mean Willbros Energy Services Company, a Delaware,
U.S.A., corporation which is a wholly-owned subsidiary of WUSAI.
"WGI Shares" shall mean 7,020 shares of Class A Common Stock of WGI,
par value U.S.$1.00 per share, and 16,770 shares of Class B Common Stock of
WGI, par value U.S.$1.00 per share.
"WGI Subsidiaries" shall mean WII, Vintondale, Musketeer, WUSAI,
WESCO, WARL and all other entities in which WGI holds, either directly or
indirectly, a greater than fifty percent (50%) ownership interest.
"WII" shall mean Willbros International, Inc., a Republic of Panama
corporation which is a wholly-owned subsidiary of WGI.
"WUSAI" shall mean Willbros USA, Inc., a Delaware, U.S.A., corporation
which is a wholly-owned subsidiary of Musketeer.
-2-
<PAGE>
2. SALE AND PURCHASE. Subject to the conditions set forth herein, Seller
-----------------
shall sell, transfer and assign to Buyer, and Buyer shall purchase and acquire
from Seller, the WGI Shares. Such transfer shall be made on the Closing Date,
but effective for all purposes as of the Effective Date, free and clear of all
liens, claims and encumbrances; provided, however, that Seller shall be entitled
to receive and retain any amounts distributed from WGI between January 1, 1992,
and the Closing, subject to the Purchase Price adjustment, as set forth in
Section 3 below. At the Closing, Seller will execute all necessary forms of
assignment and other transfer documents reasonably determined by Buyer to be
necessary or appropriate to accomplish transfer of the WGI Shares to Buyer.
3. CONSIDERATION. The purchase price for the WGI Shares shall be Sixty-
-------------
Seven Million One Hundred Thousand U.S. Dollars (U.S. $67,100,000) (the
"Purchase Price"). In consideration of the transfer described in Section 2
above, (a) at the Closing, Buyer shall deliver to Seller, by wire transfer (next
day funds) to the account or accounts designated by Seller, an aggregate amount
equal to Sixty-Six Million U.S. Dollars (U.S. $66,000,000), less any amounts
distributed by WGI to its stockholders between January 1, 1992, and the Closing;
and (b) at the closing of the transaction described in Section 14(a) below,
shall deliver to Seller, by wire transfer (next day funds) to the account or
accounts designated by Seller (or by such other method as Buyer and Seller may
mutually agree), an aggregate amount equal to One Million One Hundred Thousand
U.S. Dollars (U.S. $1,100,000).
4. CLOSING. Subject to the conditions set forth in this Agreement, the
-------
Closing shall take place on the Closing Date at the offices of Seller in Geneva,
Switzerland, or at such other place as may be mutually agreed upon by the
parties.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER. Seller hereby
---------------------------------------------------
represents and warrants to Buyer, and covenants with Buyer, as follows:
(a) Organization. Seller is a corporation, duly organized, validly
------------
existing and in good standing under the laws of the Republic of Panama and
has all requisite corporate power and authority to enter into and perform
its obligations under this Agreement. Each of Vintondale and Musketeer is
a corporation, duly organized, validly existing and in good standing under
the laws of its respective jurisdiction of incorporation, and has all
necessary corporate power and authority to own and operate its properties
and conduct the businesses in which it is now engaged.
(b) Authorization; Corporate Action. The execution, delivery and
-------------------------------
performance by Seller of this Agreement and the other documents referred to
herein have been duly authorized by all necessary corporate and other
action, including without limitation approval of the transaction by the
Board of
-3-
<PAGE>
Directors of Seller. Seller has, and shall continue to have, from and
after the date of this Agreement, full right, power and authority to sell,
assign, transfer and convey the WGI Shares to Buyer and to consummate the
transactions contemplated by this Agreement.
(c) Validity and Binding Effect. This Agreement has been duly
---------------------------
executed and delivered on behalf of Seller and constitutes a legal, valid
and binding obligation of Seller, enforceable against Seller in accordance
with its terms, except as the same may be limited by insolvency, bankruptcy
or other laws of general application affecting the enforcement of
creditor's rights and by general equitable principles. Seller has and will
transfer to Buyer on the Closing Date good and valid title to the WGI
Shares, free and clear of all liens, claims, charges, security agreements,
rights of third parties, options and encumbrances whatsoever.
(d) No Conflicting Agreements. Neither the execution and delivery of
-------------------------
this Agreement by Seller nor the fulfillment of or compliance with the
terms or provisions hereof will: (a) result in a breach of the terms,
conditions or provisions of, or constitute a default under, or result in a
violation of, the Certificate (or Articles) of Incorporation of Seller or
any agreement, license or other instrument or obligation to which Seller is
a party or by which it or any of its assets is bound; (b) result in the
violation of any provision of any applicable law, rule, regulation or
ordinance or any order, decree, writ or injunction of any court or
administrative agency or governmental authority by which Seller is bound;
or (c) result in the creation or imposition of any lien, charge,
restriction, security interest or encumbrance of any nature whatsoever upon
the WGI Shares under any instrument or agreement to which Seller or any of
its Affiliates (other than WGI or any of the WGI Subsidiaries) is a party.
Seller is not subject to any agreement, mortgage, lease, license or other
instrument, or any judgment, order, decree, or authorization of any court
or governmental agency or authority, which could prevent or impair Seller
from carrying out this Agreement or from owning and transferring the WGI
Shares to Buyer.
(e) WGI Capitalization. The authorized capital stock of WGI consists
------------------
of 100,000 shares of Class A Common Stock, 100,000 shares of Class B Common
Stock, and 300,000 shares of Class C Common Stock, all par value U.S.$1.00
per share, of which only the WGI Shares are outstanding. There are no
other securities of WGI of any class authorized or outstanding. The WGI
Shares were validly issued, are fully paid and nonassessable, and are owned
beneficially and of record by Seller, free and clear of all claims, liens,
pledges, security interests, restrictions, charges and other encumbrances.
Except for this Agreement, there are no outstanding options, warrants or
other rights of any kind to acquire any capital
-4-
<PAGE>
stock or other securities of WGI, and WGI is not committed to issue any
such option, warrant, right or security, under any instrument or agreement
executed or delivered by any officer, director or employee of Seller or any
of its Affiliates (other than WGI or any of the WGI Subsidiaries). The WGI
Shares are not subject to any proxy, voting trust agreement or other
contract, agreement, arrangement, commitment or understanding restricting
or otherwise relating to the voting, dividend, disposition or other rights
with respect to such shares.
(f) Vintondale/Musketeer Capitalization. The authorized capital stock
-----------------------------------
of Vintondale consists of thirty thousand (30,000) shares, par value
U.S.$1.00 per share, of which only six thousand (6,000) shares are issued
and outstanding, all of which are owned beneficially and of record by WGI,
free and clear of all claims, liens, pledges, security interests,
restrictions, charges and other encumbrances. The authorized capital stock
of Musketeer consists of five thousand (5,000) shares, par value DFL 1,000
per share, of which only one thousand (1,000) shares are issued and
outstanding, all of which are owned beneficially and of record by
Vintondale, free and clear of all claims, liens, pledges, security
interests, restrictions, charges and other encumbrances. There are no
outstanding options, warrants or other rights of any kind to acquire any
capital stock or other securities of Vintondale or Musketeer, and neither
Vintondale nor Musketeer is committed to issue any such option, warrant,
right or security. None of the outstanding shares of capital stock of
Vintondale or Musketeer is subject to any proxy, voting trust agreement or
other contract, agreement, arrangement, commitment or understanding
restricting or otherwise relating to the voting, dividend, disposition or
other rights with respect to such shares.
(g) Undisclosed Liabilities. Neither Vintondale nor Musketeer has any
-----------------------
liabilities, contingent or otherwise, except as set forth on the Balance
Sheet and those of the same types as set forth on the Balance Sheet which
have arisen in the ordinary course of business since the Balance Sheet
Date; provided, that this representation does not apply, directly or
indirectly, to liabilities, contingent or otherwise, of any WGI Subsidiary,
or which arise in connection with any activity or property of any WGI
Subsidiary, other than Vintondale and Musketeer.
(h) Consents. No consent from, or other approval of, or the making of
--------
any declaration or filing with, any governmental entity or any other person
is necessary in connection with the execution, delivery or performance of
this Agreement by Seller, the sale and transfer of the WGI Shares to Buyer,
or the consummation of the other transactions contemplated hereby.
-5-
<PAGE>
(i) Use of Corporate Name. Following the Closing, Seller shall not
---------------------
use or permit the use of the name "Willbros" or the W-Shield trademark or
any similar name or mark or variant thereof as the legal, assumed or trade
name of any operating entity controlling, controlled by, or under common
control with Seller.
(j) Minute Books. The minute books or similar corporate records of
------------
Vintondale and Musketeer contain complete and accurate records of all
material actions of the stockholders and directors (and any committees
thereof) of such companies since their formation.
(k) Contracts and Agreements. Seller has provided to Buyer a
------------------------
Disclosure Schedule (the "Disclosure Schedule"), which contains a true and
complete list of all material contracts, agreements, commitments and
obligations, whether oral or written, to which either Vintondale or
Musketeer is a party or by which either of them or any of their assets is
bound. The Disclosure Schedule has been initialled by Seller and Buyer for
identification. Neither Vintondale nor Musketeer is in breach or default
under any of the contracts, agreements, commitments or obligations listed
on the Disclosure Schedule.
(l) Compliance with Applicable Law. Vintondale and Musketeer (i) are,
------------------------------
to the best of Seller's knowledge after due investigation, in compliance in
every material respect with every applicable law, rule, regulation,
ordinance, license, permit and other governmental action and authority and
every order, writ and decree of every court, administrative agency or other
governmental authority in connection with the ownership, operation and
maintenance of their businesses, properties and assets; (ii) have timely
filed all tax returns required to have been filed with all appropriate
governmental agencies; and (iii) except as set forth on the Disclosure
Schedule, have no tax return audits or investigations pending or any tax
assessments, proposed or otherwise, pending or, to the knowledge of Seller,
threatened.
(m) Litigation. There are no pending, or to Seller's knowledge
----------
threatened, suits, actions or proceedings against or involving Vintondale
or Musketeer, and there is no valid basis known to Seller for any such
claim or proceeding.
(n) Powers of Attorney; Authorized Signatories. The Disclosure
------------------------------------------
Schedule also contains a true and complete list of (i) the names and
addresses of all persons holding powers of attorney on behalf of Vintondale
or Musketeer; and (ii) the account numbers and names of all banks and other
financial institutions in which Vintondale or Musketeer has an account,
deposit or safe deposit box, along with the names of all persons authorized
to draw on such account or deposit or to have access to such box.
-6-
<PAGE>
(o) Disclosure. No representation or warranty by Seller in this
----------
Agreement contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary to make the
statements contained herein not misleading in light of the circumstances
in which they are made.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER. Buyer hereby
--------------------------------------------------
represents and warrants to Seller, and covenants with Seller, as follows:
(a) Organization. Buyer is a corporation, duly organized, validly
------------
existing and in good standing under the laws of the Republic of Panama and
has all requisite corporate power and authority to enter into and perform
its obligations under this Agreement.
(b) Authorization; Corporate Action. The execution, delivery and
-------------------------------
performance by Buyer of this Agreement and the other documents referred to
herein have been duly authorized by all necessary corporate and other
action, including without limitation approval of the transaction by the
Board of Directors of Buyer.
(c) Validity and Binding Effect. This Agreement has been duly
---------------------------
executed and delivered on behalf of Buyer and constitutes a legal, valid
and binding obligation of Buyer, enforceable against Buyer in accordance
with its terms, except as the same may be limited by insolvency, bankruptcy
or other laws of general application affecting the enforcement of
creditor's rights and by general equitable principles.
(d) Investment. Buyer will be acquiring the WGI Shares for investment
----------
and not with a view to public distribution thereof, provided that the
disposition of the WGI Shares following the Closing shall at all times be
and remain within the control of Buyer.
(e) Consents. No consent from, or other approval of, or the making of
--------
any declaration or filing with, any governmental entity or any other person
is necessary in connection with the execution, delivery or performance of
this Agreement by Buyer or the purchase and receipt of the WGI Shares.
(f) Disclosure. No representation or warranty by Buyer in this
----------
Agreement contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary to make the
statements contained herein not misleading in light of the circumstances in
which they are made.
7. CONDITIONS TO BUYER'S OBLIGATION TO CLOSE. The obligation of Buyer to
-----------------------------------------
consummate the transactions contemplated
-7-
<PAGE>
hereby shall be subject to the satisfaction, on or prior to the Closing, of the
following conditions:
(a) Statements True. Each of the representations and warranties of
---------------
Seller contained in this Agreement shall in all material respects be true
when made and as of the Closing Date, with the same effect as though such
representations and warranties had been made on and as of such date.
(b) Performance of Covenants. Each of the covenants and agreements of
------------------------
Seller to be performed on or prior to the Closing Date shall have been duly
performed in all material respects.
(c) Governmental Action. No governmental agency or body shall have
-------------------
taken any action or made any requests of Buyer as a result of which the
management of Buyer deems it inadvisable to proceed with the transactions
contemplated herein, and no further consent or order from any governmental
agency or body shall be necessary in order to effectuate the transactions
contemplated herein.
(d) Absence of Legal Impediment. There shall be no legal impediment
---------------------------
to the consummation of the transactions contemplated by this Agreement.
(e) Opinion of Counsel. Buyer shall have received an opinion or
------------------
opinions, dated the Closing Date and addressed to Buyer, from Panama
counsel for Seller, satisfactory in all reasonable respects to Buyer, as to
those matters set forth in clauses (a) and (b) of Section 5 above which are
governed by Panama law.
(f) Financing. Buyer shall have received a bank loan commitment,
---------
satisfactory to Buyer in its sole discretion, for financing for this
transaction and working capital in an amount not less than Forty Million
U.S. Dollars (U.S.$40,000,000), and such loan shall have closed or shall
close simultaneously with the Closing, and the closings shall have occurred
under the Preferred Stock Purchase Agreement and the Note and Warrant
Purchase Agreement.
8. CONDITIONS TO SELLER'S OBLIGATION TO CLOSE. The obligation of Seller
------------------------------------------
to consummate the transactions contemplated hereby shall be subject to the
satisfaction, on or prior to the Closing, of the following conditions:
(a) Statements True. Each of the representations and warranties of
---------------
Buyer contained in this Agreement shall in all material respects be true
when made and as of the Closing Date, with the same effect as though such
representations and warranties had been made on and as of such date.
-8-
<PAGE>
(b) Performance of Covenants. Each of the covenants and agreements of
------------------------
Buyer to be performed on or prior to the Closing Date shall have been
performed in all material respects.
(c) Governmental Action. No governmental agency or body shall have
-------------------
taken any action or made any requests of Seller as a result of which the
management of Seller deems it inadvisable to proceed with the transactions
contemplated herein, and no further consent or order from any governmental
agency or body shall be necessary in order to effectuate the transactions
contemplated herein.
(d) Absence of Legal Impediment. There shall be no legal impediment
---------------------------
to the consummation of the transactions contemplated by this Agreement.
(e) Opinion of Counsel. Seller shall have received an opinion or
------------------
opinions, dated the Closing Date and addressed to Seller, from Panama
counsel for Buyer, satisfactory in all reasonable respects to Seller, as to
those matters set forth in clauses (a) and (b) of Section 6 above which are
governed by Panama law.
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
------------------------------------------
warranties, covenants and agreements made by Buyer and Seller in this Agreement
or pursuant hereto shall survive any investigations made by or on behalf of
Buyer and Seller and shall survive the Closing for a period of four (4) years.
10. SELLER'S INDEMNITY.
------------------
(a) Effective at Closing, Seller hereby agrees to indemnify, defend
and hold harmless Buyer, and Buyer's shareholders, officers and directors,
from and against and in respect of, and will reimburse such persons for:
(i) Any and all damages, losses, expenses, obligations and
liabilities suffered or incurred by Buyer, WGI or any of the WGI
Subsidiaries resulting from any misrepresentation, breach of warranty
or nonfulfillment of any covenant or agreement by or on the part of
Seller hereunder; and
(ii) Any and all actions, suits, proceedings, demands,
assessments, judgments and costs incident to any of the foregoing,
including without limitation reasonable attorneys' fees and
disbursements, court costs (at all levels) and interest.
-9-
<PAGE>
(b) Effective at Closing, and without limiting the provisions of
clause (a) of this Section 10, Seller hereby agrees to indemnify, defend
and hold harmless Buyer and Buyer's shareholders, officers and directors,
from and against and in respect of, and will refund to Buyer as a reduction
of the Purchase Price, the full amount of any tax (plus all penalties and
interest associated therewith and all reasonable accountants' and
attorneys' fees, court costs (at all levels) and other costs incurred in
defending against the imposition of any such tax) which becomes payable on
or after the Closing Date with respect to any taxable year which began
after December 31, 1978, and ended prior to January 1, 1992, by WGI or any
entity in which WGI directly or indirectly owns a greater than fifty
percent (50%) equity interest as of or prior to the date hereof, to the
United States of America or any state or local taxing authority therein, on
account of any revenue or income earned or received from any source,
activity conducted, interest paid or received, or dividend or other
distribution paid or received, or the occurrence of any other event, at any
time after December 31, 1978, and prior to January 1, 1992, to the extent
such tax, in the aggregate, is not accrued, reserved against, or otherwise
reflected in the Balance Sheet; provided, however, that such indemnity and
refund obligations shall not apply to any such tax which arises as a direct
result of changes made after the Closing Date, without Seller's consent, in
the corporate group structure of WGI or the WGI Subsidiaries (other than
(i) the combination of Buyer and WGI through a merger or consolidation or
the dissolution and liquidation of WGI into Buyer, and (ii) changes in the
corporate group structure of the WGI Subsidiaries at any level below WII or
WUSAI, including without limitation the creation, dissolution, sale,
acquisition, merger or consolidation of new or existing corporations at any
level below WII or WUSAI) or in the United States federal or state tax
reporting position of WGI or any WGI Subsidiary; provided further, that the
immediately preceding proviso shall not apply to any such change which is
required by applicable law (including without limitation any statute,
regulation, revenue procedure or ruling, binding official interpretation or
decision); and provided further, that Seller shall be given notice of any
proposal to make any change (as described in the first proviso set forth in
this Section 10(b)) and Seller shall be deemed to have consented to such
change unless Seller has notified Buyer, within thirty (30) days after the
date on which the notice is delivered or deemed to have been delivered
(pursuant to Section 17(d) below) to Seller, of Seller's objection to such
change and the reasons therefor. Under no circumstances shall Buyer, WGI
or any WGI Subsidiary be required to carry back to any year of adjustment
prior to 1992 any net operating loss deduction arising on or after January
1, 1992.
-10-
<PAGE>
11. BUYER'S INDEMNITY. Effective at Closing, Buyer hereby agrees to
-----------------
indemnify, defend and hold harmless Seller and its shareholders, officers and
directors from and against and in respect of, and will reimburse such persons
for:
(a) Any and all damages, losses, expenses, obligations and liabilities
suffered or incurred by Seller resulting from any misrepresentation, breach
of warranty or nonfulfillment of any covenant or agreement by or on the
part of Buyer hereunder; and
(b) Any and all actions, suits, proceedings, demands, assessments,
judgments and costs incident to any of the foregoing, including without
limitation reasonable attorneys' fees and disbursements, court costs (at
all levels) and interest.
12. LIMITATION ON INDEMNITY OBLIGATIONS. Notwithstanding Sections 10 and
-----------------------------------
11 above, Seller's and Buyer's indemnity obligations, as set forth in said
Sections 10 and 11, and the right of the indemnified persons to be so
indemnified by Seller and Buyer, shall be subject to and limited by the
following:
(a) Seller's obligations under Section 10(b) above shall be limited to
a maximum amount of taxes, in the aggregate, equal to U.S.$17,500,000, plus
all penalties and interest associated therewith and all reasonable
accountants' and attorneys' fees, court costs (at all levels) and other
costs incurred in defending against the imposition of any such tax.
(b) Seller shall have no obligation under Section 10(a) above, and
Buyer shall have no obligation under Section 11 above, with respect to any
such damage, loss, expense, obligation or liability unless Buyer or any
other indemnified person shall have notified Seller, or Seller or any other
indemnified person shall have notified Buyer, as the case may be, of such
claim for indemnity within four (4) years after the Closing Date. Seller
shall have no obligation under Section 10(b) above with respect to any
claim for indemnification thereunder unless Buyer or any other indemnified
person shall have notified Seller of such claim for indemnity on or before
March 31, 2001.
(c) Notwithstanding anything to the contrary contained in this
Agreement (other than Section 12(a) above), if the total amount of all of
the taxes covered by the indemnifica-tion provisions of Section 10(b) above
exceeds U.S.$1,500,000, Seller's indemnity obligation under said Section
10(b) shall be limited to ninety percent (90%) of the amount of such taxes
in excess of U.S.$1,500,000 up to U.S.$11,500,000 but (subject to Section
12(a) above) shall include the entire amount of such taxes in excess of
U.S.$11,500,000.
-11-
<PAGE>
13. INDEMNITY PROCEDURE. For the purposes of administering the
-------------------
indemnification provisions set forth in Sections 10 and 11 above, the
indemnified person shall give written notice to the indemnifying party of any
communication regarding the commencement of any audit, action, suit or
proceeding, or the written assertion of any claim or the occurrence of any
damage, loss, expense, obligation or liability for which indemnification is
provided hereunder, as soon as reasonably possible after the indemnified person
becomes aware of the occurrence or receipt of the communication. In any such
proceeding, at any time following receipt of notice, the indemnifying party
shall be entitled, at its sole discretion, to assume the entire defense of such
claim or action (with counsel selected by it which is reasonably satisfactory to
the indemnified person) or settle such claim or action (provided, however, no
such claim or action, shall be finally settled without the prior written consent
of the indemnified person and the indemnifying party, such consent not to be
unreasonably withheld). In any event the indemnifying party shall bear the
entire cost incurred by the indemnifying party, or incurred by the indemnified
person to the extent reasonably allocable to the indemnified claim, in the
defense and/or settlement of such claim or action. In the event of the
assumption of the defense by the indemnifying party, the indemnified person
shall have the right to participate in the defense of such claim or action, at
its own expense.
14. CERTAIN COVENANTS.
-----------------
(a) Monastere and Vessel MWB. Within three (3) months after the
------------------------
Closing, Buyer shall cause WUSAI to sell, and Seller shall buy or cause one
of its affiliates to buy from WUSAI, all of the Monastere Shares and all of
the Vessel MWB Shares for an aggregate purchase price in cash equal to One
U.S. Dollar (U.S.$1.00). At the same time, all remaining intercompany debt
due to or from Monastere or Vessel MWB, on the one hand, from or to WGI or
any of the WGI Subsidiaries (other than Monastere and Vessel MWB), on the
other hand, shall be settled in cash. Neither Buyer, WUSAI nor any other
WGI Subsidiary shall be required to make any representation, warranty or
indemnity as to Monastere or Vessel MWB, other than as to clear title to
the Monastere Shares and the Vessel MWB Shares.
(b) Non-Compete Agreement. Contemporaneously with the execution of
---------------------
this Agreement, Buyer and Seller shall execute a Non-Compete Agreement in
the form of Exhibit A hereto.
(c) Settlement of Intercompany Debt. On or prior to the Closing Date,
-------------------------------
Seller and Buyer shall settle or cause to be settled all intercompany debt
due to or from WGI or any of the WGI Subsidiaries, on the one hand, from or
to Seller or any of Seller's other affiliates (which are not owned by WGI),
on the other hand.
-12-
<PAGE>
(d) Confidentiality. Each of the parties hereto shall keep
---------------
confidential the transactions contemplated in this Agreement and shall
not disclose, or permit any of its Affiliates to disclose, any information
concerning such transactions (including without limitation the identity
of the parties hereto and their constituent members) to any Person, other
than its officers, directors, employees, agents, representatives,
stockholders, and potential lenders and investors, except with the
consent of the other.
(e) Agreements between Seller and WGI. Seller and Buyer shall cause
---------------------------------
any agreements or contracts in existence between Seller or any of its
Affiliates (other than WGI and the WGI Subsidiaries), on the one hand, and
WGI or any of the WGI Subsidiaries, on the other hand, to be canceled and
terminated on the Closing Date but effective as of the Effective Date.
(f) Surety Guaranties. The parties acknowledge that Seller has issued
-----------------
certain guaranties on behalf of various WGI Subsidiaries in favor of
Seaboard Surety Company ("Seaboard") and American International Companies
("AIC") which Seaboard and AIC will not release, and that such guaranties
will be allowed to expire in accordance with their terms. From and after
the Closing, Buyer shall indemnify, and cause WGI and the WGI Subsidiaries
to indemnify, Seller against any claim under any such guaranty.
(g) Willbros, B.V.; Willbros Nederlandse Antillen, N.V. Seller shall
---------------------------------------------------
cooperate with and assist Buyer, as reasonably requested by Buyer, in
changing the names of Willbros, B.V., a Netherlands corporation ("WBV"),
and Willbros Nederlandse Antillen, N.V. ("WNANV"), a Netherlands Antilles
corporation, both of which are WGI Subsidiaries, so that neither of them
contains the word "Willbros" or any similar name or any variant thereof.
Following such name changes, Buyer shall cause WGI to sell, and Seller
shall buy or cause one of its Affiliates to buy from WGI, all of the issued
and outstanding shares of WNANV and WBV for U.S.$1.00. From and after the
Closing, and until such sale, Buyer shall not cause WNANV or WBV to engage
in any business or operations. Neither Buyer, WGI nor any WGI Subsidiary
shall be required to make any representation, warranty or indemnity as to
WNANV or WBV.
15. TERMINATION. This Agreement may be terminated at any time prior to
-----------
the Closing as follows: (a) by the mutual consent of Buyer and Seller; (b) by
Buyer if any of the conditions specified in Section 7 above have not been
satisfied on or prior to the Closing and have not been waived by Buyer; (c) by
Seller if any of the conditions specified in Section 8 above have not been
satisfied on or prior to the Closing and have not been waived by Seller; or (d)
on April 10, 1992, if the Closing shall not have occurred on or before such
date, unless such date is extended by mutual agreement of the parties. In the
event of termination of this Agreement as
-13-
<PAGE>
provided in this Section 15, this Agreement shall forthwith become void and have
no effect, without any liability on the part of either party, except as to
Section 14(d) which shall survive such termination.
16. SPECIFIC ENFORCEMENT. Seller agrees that the WGI Shares contracted to
--------------------
be conveyed hereunder cannot be readily obtained in the open market and that
Buyer will be irreparably injured if this Agreement is not specifically
enforced. Therefore, in the event of Seller's default and if Buyer shall
institute any action to specifically enforce Seller's performance under this
Agreement, Seller agrees to waive the defense that Buyer has an adequate remedy
at law and to interpose no opposition, legal or otherwise as to the propriety of
Buyer's pursuing specific performance as a remedy.
17. MISCELLANEOUS.
-------------
(a) Further Assurances. Seller will, from time to time, execute and
------------------
deliver, or cause others to execute and deliver, to or upon the order of
Buyer, such further instruments and take such other action as Buyer may
reasonably request in order to more effectively convey, assign, transfer
and deliver or place Buyer in possession and control of the WGI Shares, or
to enable Buyer to exercise and enjoy all rights and benefits with respect
thereto.
(b) Binding Effect. This Agreement may not be assigned by either
--------------
party hereto without the prior written consent of the other party. Subject
to the foregoing, this Agreement shall be binding upon, and shall inure to
the benefit of, the parties hereto and their respective successors and
assigns. Except as provided herein, nothing in this Agreement, express or
implied, is intended or shall be construed to give to any person other than
the parties hereto any right, remedy or claim under or by reason of this
Agreement.
(c) Entire Agreement. This Agreement constitutes the entire agreement
----------------
and understanding between the parties hereto, and supersedes any prior
agreement or correspondence, relating to the subject matter hereof. This
Agreement may be modified or amended only by a written instrument executed
by the parties hereto.
(d) Notices. All notices, requests, demands and other communications
-------
required or permitted under this Agreement shall be in writing and shall be
deemed to have been delivered on the date personally delivered by hand,
telegram, facsimile or by similar means, or on the fifth day following the
day when deposited in the mail, registered or certified, postage prepaid,
addressed as follows:
If to Seller: Heerema Holding Construction, Inc.
-14-
<PAGE>
5, rue Pedro Meylan
1208 Geneva
Switzerland
Attention: Mr. G. E. Waldvogel
If to Buyer: Willbros Acquisition Corp.
Edificio Bank of America
Calle 50, Apartado 6307
Panama 5, Republic of Panama
With a copy to: John N. Hove, Esq.
Suite 200, 2431 East 61st Street
Tulsa, Oklahoma 74136
U.S.A
Either party may change its address for receiving notices by giving written
notice of such change to the other party in accordance with this Section
17(d).
(e) Headings. The use of headings and captions herein is solely for
--------
the convenience of the parties hereto and shall not limit or otherwise
affect the construction of any of the terms or provisions hereof.
(f) Applicable Law. This Agreement shall be governed by and construed
--------------
in accordance with the laws of the State of New York, U.S.A., without
regard to principles of conflicts of laws.
(g) Waivers. No waiver of any term, provision or condition of this
-------
Agreement shall be effective unless in writing signed by the party granting
the waiver, and no such waiver shall be deemed to be or construed as a
further or continuing waiver of such term, provision or condition or as a
waiver of any other term, provision or condition of this Agreement, unless
specifically so stated in such waiver.
(h) Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which taken together shall constitute one and the same
instrument.
(i) Exhibits. Each of the Exhibits referred to herein is attached
--------
hereto and by this reference made a part hereof.
(j) Disclosure. Following the Closing Date, Seller will not disclose
----------
to any third party any information relating to Buyer, WGI or any of the WGI
Subsidiaries, without the prior written consent of Buyer.
-15-
<PAGE>
(k) Access to Records. Each of Buyer and Seller shall cooperate and
-----------------
provide to the other access to records retained by such party, to the
extent the other party reasonably requires such access.
IN WITNESS WHEREOF, Buyer and Seller have caused this Agreement to be duly
executed and delivered on their behalf on the day and year first above written.
"Buyer" "Seller"
WILLBROS ACQUISITION CORP. HEEREMA HOLDING
- -------------------------- ---------------
CONSTRUCTION, INC.
By: /s/ Larry J. Bump By: /s/ Pieter H. Heerema
-------------------------- -----------------------
Name: Larry J. Bump Name: Pieter H. Heerema
-------------------- ------------------
Title: President Title: President
-------------------- ------------------
Exhibit
- -------
A - Non-Compete Agreement
-16-
<PAGE>
The following exhibit to the Stock Purchase Agreement dated April 9, 1992,
by and between Willbros Acquisition Corp. and Heerema Holding Construction, Inc.
has been omitted, and the Registrant agrees to furnish supplementally a copy of
such omitted exhibit to the Securities and Exchange Commission upon its request:
Exhibit
-------
Exhibit A - Non-Compete Agreement
<PAGE>
EXHIBIT 10.16
INDEMNIFICATION AGREEMENT
-------------------------
THIS INDEMNIFICATION AGREEMENT (hereinafter referred to as the
"Agreement") is made and entered into this/as of the ___ day of __________,
199__, by and between WILLBROS GROUP, INC., a Panama corporation (hereinafter
referred to as the "Company"), and ____________________, an individual
(hereinafter referred to as the "Indemnitee").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available;
WHEREAS, Indemnitee is an officer or director of the Company or of an
entity in which the Company directly or indirectly owns an interest;
WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
companies in today's environment;
WHEREAS, the Articles of Incorporation and/or By-laws of the Company
(hereinafter referred to as the "Charter Documents") require the Company to
indemnify its officers and directors, and persons who serve at its request as
officers or directors of other companies, and Indemnitee has served and
continues to serve in such capacity, in part in reliance on the Charter
Documents; and
WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability in order to enhance Indemnitee's continued service to
the Company in an effective manner, the absence of director and officer
liability insurance coverage, and Indemnitee's reliance on the Charter
Documents, and in part to provide Indemnitee with specific contractual assurance
that the protection promised by the Charter Documents will be available to
Indemnitee (regardless of, among other things, any amendment to or revocation of
the Charter Documents or any change in the composition of the Company's Board of
Directors or acquisition transaction relating to the Company), the Company
wishes to provide in this Agreement for the indemnification of and the advancing
of expenses to Indemnitee to the fullest extent (whether partial or complete)
permitted by law and
-1-
<PAGE>
as set forth in this Agreement, and, if insurance is obtained, for the coverage
of Indemnitee under the Company's directors' and officers' liability insurance
policies.
NOW, THEREFORE, in consideration of the premises and of Indemnitee's
continuing to serve the Company directly, or at its request another enterprise,
and intending to be legally bound hereby, the parties hereto agree as follows:
1. Certain Definitions:
--------------------
(a) Change in Control: shall be deemed to have occurred if (i) any
------------------
"person" (as defined in Section 1(e) below) becomes, after the date hereof, the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended [hereinafter referred to as the "1934 Act"]), directly or
indirectly, of securities of the Company representing 50% or more of the total
voting power represented by the Company's then outstanding Voting Securities;
or (ii) during any period of two (2) consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company and
any new director whose election by the Company's Board of Directors or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or (iii) a merger or consolidation of the Company with any
other corporation is approved, other than a merger or consolidation which would
result in the Voting Securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into Voting Securities of the surviving entity) at least eighty
percent (80%) of the total voting power represented by the Voting Securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation; or (iv) a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
of the Company's assets is approved.
(b) Claim: any threatened, pending or completed action, suit or
------
proceeding, or any inquiry or investigation, whether conducted by the Company or
any other party, that Indemnitee in good faith believes might lead to the
institution of any such action, suit or proceeding, whether civil, criminal,
administrative, investigative or other.
(c) Expenses: include attorneys' fees and all other costs, expenses
---------
and obligations paid or incurred in connection with investigating, defending,
being a witness in, participating in (including on appeal), or preparing
-2-
<PAGE>
to defend, be a witness in or participate in any Claim relating to any
Indemnifiable Event.
(d) Indemnifiable Event: any event or occurrence related to the fact
--------------------
that Indemnitee is or was a director, officer, employee, agent or fiduciary of
the Company, or is or was serving at the request (expressed or implied) of the
Company as a director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise, or by reason of anything done or not done by Indemnitee in any such
capacity.
(e) Person: any person, as such term is used in Sections 13(d) and
-------
14(d) of the 1934 Act, but excluding therefrom a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or a
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.
(f) Potential Change in Control: shall be deemed to have occurred if
----------------------------
(i) the Company enters into an agreement the consummation of which would result
in the occurrence of a Change in Control; (ii) any person (including the
Company) publicly announces an intention to take or to consider taking actions
which if consummated would constitute a Change in Control; or (iii) the Board
of Directors of the Company adopts a resolution to the effect that, for purposes
of this Agreement, a Potential Change in Control has occurred.
(g) Reviewing Party: any appropriate person or body consisting of a
----------------
member or members of the Company's Board of Directors or any other person or
body appointed by the Company's Board of Directors (including the special,
independent counsel referred to in Section 3 below) who is not a party to the
particular Claim for which Indemnitee is seeking indemnification.
(h) Voting Securities: any securities of the Company which vote
------------------
generally in the election of directors.
2. Basic Indemnification Arrangement.
----------------------------------
(a) In the event Indemnitee was, is or becomes a party to or witness or
other participant in, or is threatened to be made a party to or witness or other
participant in, a Claim by reason of (or arising in part out of) an
Indemnifiable Event, the Company shall indemnify Indemnitee to the fullest
extent permitted by law, as the same exists or hereafter may be amended,
promptly upon the receipt
-3-
<PAGE>
of written demand, against any and all Expenses, judgments, fines, penalties and
amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of such Expenses,
judgments, fines, penalties or amounts paid in settlement) of such Claim. If so
requested by Indemnitee, the Company shall advance (within two [2] business days
after the Company's receipt of such request) any and all Expenses to Indemnitee
(hereinafter referred to as an "Expense Advance"). Notwithstanding anything in
this Agreement to the contrary, prior to a Change in Control, Indemnitee shall
not be entitled to indemnification pursuant to this Agreement in connection with
any claim initiated by Indemnitee against the Company or any director or officer
of the Company unless the Company has joined in or consented to the initiation
of such Claim.
(b) Notwithstanding the foregoing, (i) the obligations of the Company
under Section 2(a) shall be subject to the condition that the Reviewing Party
shall not have determined (in a written legal opinion if the special,
independent counsel referred to in Section 3 below is involved) that
indemnification of Indemnitee would not be permitted under applicable law,
provided, that to be effective any such denial of indemnity must be in writing,
delivered to the Indemnitee, stating with particularity the reason for such
denial; and (ii) the obligation of the Company to make an Expense Advance
pursuant to Section 2(a) above shall be subject to the condition that if, when
and to the extent that the Reviewing Party determines that indemnification of
Indemnitee would not be permitted under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid; provided, however, that if
Indemnitee has commenced legal proceedings in a court of competent jurisdiction
to secure a determination that Indemnitee should be indemnified under applicable
law, any determination made by the Reviewing Party that indemnification of
Indemnitee would not be permitted under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto (as to
which all rights of appeal therefrom have been exhausted or lapsed).
(c) If there has not been a Change in Control, the Reviewing Party shall
be selected by the Board of Directors of the Company, and if there has been such
a Change in Control, the Reviewing Party shall be the special, independent
counsel referred to in Section 3 below. If there has been no determination by
the Reviewing Party or if the Reviewing Party determines that indemnification of
Indemnitee would not be permitted in whole or in part under applicable law,
Indemnitee shall have the right to commence litigation, in any court in the
state of Oklahoma or Delaware or the Republic of Panama having subject matter
jurisdiction thereof and in which venue is proper, seeking an initial
determination
-4-
<PAGE>
by the court or challenging any such determination by the Reviewing Party or any
aspect thereof, and the Company hereby consents to service of process and to
appear in any such proceeding. Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company and Indemnitee.
3. Change in Control. The Company agrees that if there is a Change
------------------
in Control, then, with respect to all matters thereafter arising concerning the
rights of Indemnitee to indemnity payments and Expense Advances under this
Agreement or any other agreement or the Charter Documents now or hereafter in
effect relating to Claims for Indemnifiable Events, the Company shall seek legal
advice only from special, independent counsel selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably withheld),
which counsel has not otherwise performed services for the Company or Indemnitee
within the last five (5) years (other than in connection with such matters).
Such counsel, among other things, shall render its written opinion to the
Company and Indemnitee as to whether and to what extent the Indemnitee would be
permitted to be indemnified under applicable law. The Company agrees to pay the
reasonable fees of the special, independent counsel referred to above and to
fully indemnify such counsel against any and all expenses (including attorneys'
fees), claims, liabilities and damages arising out of or relating to this
Agreement or such counsel's engagement pursuant hereto.
4. Establishment of Trust. In the event of a Potential Change in
-----------------------
Control, the Company shall promptly, upon written request by Indemnitee, create
a trust for the benefit of Indemnitee (hereinafter referred to as the "Trust")
and, from time to time upon written request by Indemnitee, shall fund the Trust
in an amount sufficient to satisfy (a) any and all Expenses reasonably
anticipated at the time of each such request to be incurred in connection with
investigating, preparing for and defending any Claim relating to an
Indemnifiable Event, and (b) any and all judgments, fines, penalties and
settlement amounts of any and all Claims relating to an Indemnifiable Event from
time to time actually paid or claimed, reasonably anticipated or proposed to be
paid. The terms of the Trust shall provide that, upon a Change in Control, (i)
the Trust shall not be revoked or the principal thereof invaded, without the
written consent of Indemnitee; (ii) the trustee of the Trust (hereinafter
referred to as the "Trustee"), shall advance to Indemnitee, within two (2)
business days of a request by Indemnitee, any and all Expenses (and Indemnitee
hereby agrees to reimburse the Trust under the circumstances under which
Indemnitee would be required to reimburse the Company under Section 2(b) above);
(iii) the Trust shall continue to be funded by the Company in accordance with
the funding obligation set forth above; (iv) the Trustee shall
-5-
<PAGE>
promptly pay to Indemnitee all amounts for which Indemnitee shall be entitled to
indemnification pursuant to this Agreement or otherwise; and (v) all unexpended
funds in the Trust shall revert to the Company upon a final determination by the
Reviewing Party or a court of competent jurisdiction, as the case may be, that
Indemnitee has been fully indemnified under the terms of this Agreement. The
Trustee shall be chosen by Indemnitee, with the approval of the Company (which
approval shall not be unreasonably withheld), and all reasonable expenses, fees
and other disbursements of the Trustee in connection with the establishment and
administration of the Trust shall be paid by the Company. Nothing in this
Section 4 shall relieve the Company of any of its obligations under this
Agreement or any provision of the Charter Documents or other agreement now or
hereafter in effect.
5. Indemnification for Additional Expenses. The Company shall
----------------------------------------
indemnify Indemnitee against any and all expenses (including attorneys' fees)
and, if requested by Indemnitee, shall (within two [2] business days after
receipt of such request) advance such expenses to Indemnitee, which are
incurred by Indemnitee in connection with any claim asserted against or action
brought by Indemnitee for (a) indemnification or advance payment of Expenses by
the Company under this Agreement or any other agreement or any provision of the
Charter Documents now or hereafter in effect relating to Claims for
Indemnifiable Events; and/or (b) recovery under any directors' and officers'
liability insurance policies maintained by the Company, provided that in either
case, Indemnitee ultimately is determined to be entitled in whole or in part, to
such indemnification, advance expense payment or insurance recovery, as the case
may be. The Company shall be entitled to be reimbursed by Indemnitee (who
hereby agrees to reimburse the Company) for all such amounts theretofore paid
Indemnitee under this Section 5 if Indemnitee ultimately is determined not to be
entitled to such indemnification, advance expense payment or insurance recovery,
as the case may be.
6. Partial Indemnity, etc. If Indemnitee is entitled under any
-----------------------
provision of this Agreement to indemnification by the Company for a portion, but
not all, of the Expenses, judgments, fines, penalties and amounts paid in
settlement of a Claim, the Company shall nevertheless indemnify Indemnitee for
the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding
any other provision of this Agreement, to the extent that Indemnitee has been
successful on the merits or otherwise in defense of any or all Claims relating
in whole or in part to an Indemnifiable Event or in defense of any issue or
matter therein, including without limitation dismissal without prejudice,
Indemnitee shall be indemnified against all Expenses incurred in connection
therewith.
-6-
<PAGE>
7. Burden of Proof. In connection with any determination by the
----------------
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified hereunder the burden of proof shall be on the Company to establish
that Indemnitee is not so entitled.
8. No Presumption. For purposes of this Agreement, the termination
---------------
of any claim, action, suit or proceeding, by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that Indemnitee
did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable
law.
9. Non-exclusivity, etc. The rights of Indemnitee hereunder shall
---------------------
be in addition to any other rights Indemnitee may have under the Charter
Documents or the corporate law of the Republic of Panama or otherwise. To the
extent that a change in the corporate law of the Republic of Panama (whether by
statute or judicial decision) permits greater indemnification by agreement than
would be afforded currently under the Charter Documents and this Agreement, it
is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits so afforded by such change.
10. Limitation on Liability. To the fullest extent permitted by the
------------------------
laws of the Republic of Panama, as the same exist or may hereafter be amended,
the Indemnitee shall not be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director.
No amendment to or deletion of this Section 10 shall apply to, or have any
effect on, the liability or alleged liability of the Indemnitee for or with
respect to any acts or omissions of the Indemnitee occurring prior to such
amendment or repeal.
11. Liability Insurance. To the extent the Company maintains an
--------------------
insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be covered by such policy or policies, in accordance
with its or their terms, to the maximum extent of the coverage available for any
Company director or officer.
12. Amendments, etc. No supplement, modification or amendment of
----------------
this Agreement shall be binding unless executed in writing by both of the
parties
-7-
<PAGE>
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.
13. Subrogation. In the event of payment under this Agreement, the
------------
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including without
limitation the execution of such documents as may be necessary to enable the
Company effectively to bring suit to enforce such rights.
14. No Duplication of Payment. The Company shall not be liable under
--------------------------
this Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, the Charter Documents or otherwise) of the amounts
otherwise indemnifiable hereunder.
15. Binding Effect, etc. This Agreement shall be binding upon and
--------------------
inure to the benefit of and be enforceable by the parties hereto and their
respective successors, assigns (including without limitation any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company), spouse, heirs,
and personal and legal representatives. This Agreement shall continue in effect
regardless of whether Indemnitee continues to serve as an officer or director of
the Company or of any other enterprise at the Company's request.
16. Severability. The provisions of this Agreement shall be
-------------
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph or sentence) are held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable, and the
remaining provisions shall remain enforceable to the fullest extent permitted by
law.
17. Governing Law. This Agreement shall be governed by and construed
--------------
and enforced in accordance with the laws of the Republic of Panama applicable to
contracts made and to be performed in such country without giving effect to the
principles of conflicts of laws.
-8-
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by Indemnitee and a duly authorized representative of the Company on/as of the
date first above written.
WILLBROS GROUP, INC.
By:
Title:
(Indemnitee's typed name below line)
-9-
<PAGE>
EXHIBIT 10.17
WILLBROS ENGINEERS, INC.
MANAGEMENT INCENTIVE PLAN
January 1, 1996
<PAGE>
WILLBROS ENGINEERS, INC.
MANAGEMENT INCENTIVE PLAN
Effective Date: January 1, 1996
Participants
- ------------
The Participant shall be J. R. Beasley.
Source of Participation
- -----------------------
Engineering Operating Income and Performance Net Income as defined below
shall be the sources of participation.
Percentage Allocated
- --------------------
For each U.S.$100,000 of Engineering Operating Income in excess of
U.S.$1,500,000, the Participant shall earn a bonus of 1.5% of the Participant's
base salary. For each U.S.$100,000 of Performance Net Income, the Participant
shall earn a bonus of .5% of the Participant's base salary.
Award Limitations
- -----------------
The Participant's incentive compensation shall not exceed 100% of the
Participant's base salary.
Prorated Payout
- ---------------
If the Participant is terminated, his award for the year of termination
shall be prorated based on the number of months worked in the year of
termination, if he works more than six months in that year. If the Participant
is terminated before he has worked six months in the year of termination,
or if the Participant terminates at his convenience, no award shall be made
to the Participant for the year of termination.
Term
- ----
The Management Plan shall be effective for the calendar years 1996, 1997
and 1998. It may be modified, amended or extended by mutual agreement after
1998.
Definitions of Terms
- --------------------
(a) Engineering Operating Income - engineering income before Tulsa office
overhead, incentive compensation, interest income, interest expense,
gain or loss on sale or retirement of equipment, unallocated expenses,
U.S. federal income taxes and adjustments for revenues, expenses,
charges or credits for the benefit of the shareholder or an affiliated
company.
<PAGE>
(b) Performance Net Income - Adjusted Net Income in excess of an amount
that equals a sixteen percent (16%) return on Average Net Assets
Employed during the year.
(c) Adjusted Net Income - net income of Willbros Group, Inc. before interest
income, interest expense and incentive compensation and after deducting
the Adjusted Net Loss Carryover, if any, from the immediately preceding
year.
(d) Adjusted Net Loss Carryover - net loss of Willbros Group, Inc. before
interest income, interest expense, and incentive compensation.
(e) Average Net Assets Employed - stockholders' equity plus debt, less
cash and short-term investments.
WILLBROS ENGINEERS, INC.
By: /s/ Steve W. Shores
--------------------------------
Name: Steve W. Shores
------------------------------
Title: Senior Vice President
-----------------------------
PARTICIPANT:
/s/ J. R. Beasley
------------------------------------
J. R. Beasley
<PAGE>
EXHIBIT 10.18
WILLBROS USA, INC.
MANAGEMENT INCENTIVE PLAN
January 1, 1996
<PAGE>
WILLBROS USA, INC.
MANAGEMENT INCENTIVE PLAN
Effective Date: January 1, 1996
Participants
- ------------
The Participants shall be L. J. Bump, M. K. Phillips and G. L. Bracken and
M. F. Spreitzer.
Source of Participation
- -----------------------
Performance Net Income as defined below shall be the source of participation.
Percentage Allocated
- --------------------
For each U.S.$100,000 of Performance Net Income, each Participant shall earn a
bonus of 1.5% of such Participant's base salary.
Award Limitations
- -----------------
The incentive compensation payable to L. J. Bump shall not exceed 300% of
his base salary. The incentive compensation payable to M. K. Phillips, G.
L. Bracken or M. F. Spreitzer shall not exceed 200% of the applicable
Participant's base salary.
Payout Limitations
- ------------------
Payout in any year, except in the year of termination, shall be limited
to 100% of the Participant's base salary plus 100% of any excess carried
forward from the prior year. Excess amounts shall be paid upon termination,
including death, disability or retirment. Excess amounts shall earn interest
at Bank of Amierca's prime rate until paid. If a Participant is terminated,
his award for the year of termination shall be prorated based on the number of
months worked in the year of termination, if he works more than six months in
that year. If a Participant is terminated before he has worked six months in
the year of termination, or if a Participant terminates at his convenience, no
award shall be made to that Participant for the year of termination.
Term
- ----
The Management Incentive Plan shall be effective for the calendar years 1996,
1997 and 1998. It may be modified, amended or extended by mutual agreement after
1998.
Definitions of Terms
- --------------------
(a) Performance Net Income - Adjusted Net Income in excess of an amount
that equals a sixteen percent (16%) return on Average Net Assets
Employed during the year.
<PAGE>
(b) Adjusted Net Income - net income of Willbros Group, Inc. before interest
income, interest expense and incentive compensation and after deducting
the Adjusted Net Loss Carryover, if any, from the immedately preceding
year.
(c) Adjusted Net Loss Carryover - net loss of Willbros Group, Inc. before
interest income, interest expense, and incentive compensation.
(d) Average Net Assets Employed - stockholders' equity plus debt, less
cash and short-term investments.
WILLBROS USA, INC.
By: /s/ Larry J. Bump
----------------------------------
Name: Larry J. Bump
--------------------------------
Title: President, Chief Executive Officer
-------------------------------
and Chief Operating Officer
PARTICIPANTS:
/s/ L. J. Bump
--------------------------------------
L. J. Bump
/s/ G. L. Bracken
--------------------------------------
G. L. Bracken
/s/ M. K. Phillips
--------------------------------------
M. K. Phillips
/s/ M. F. Spreitzer
--------------------------------------
M. F. Spreitzer
<PAGE>
EXHIBIT 23.1
When the conversion of the Preferred Stock described in Note 15 in the
accompanying consolidated financial statements has been consummated, we will
be in a position to render the following consent.
KPMG PEAT MARWICK
INDEPENDENT AUDITORS' CONSENT
The Stockholders and Board of Directors
Willbros Group, Inc.:
We consent to the use of our reports included herein and to the references
to our firm under the headings "Selected Consolidated Financial and Other
Data" and "Experts" in the prospectus.
Panama City, Panama
July , 1996
<PAGE>
EXHIBIT 23.3
CONSENT OF CONNER & WINTERS, A PROFESSIONAL CORPORATION
We hereby consent to all references of our firm in the Prospectus forming a
part of this Registration Statement.
CONNER & WINTERS,
A Professional Corporation
July 11, 1996
