<PAGE>
PROSPECTUS
432,881 Shares
[LOGO]
The Shaw Group Inc.
Common Stock
--------------------
The 432,881 shares of common stock, no par value (the "Common Stock")
of The Shaw Group Inc. ("Shaw" or the "Company") offered hereby may be sold from
time to time by certain stockholders of the Company described herein (the
"Selling Stockholders") in transactions on the New York Stock Exchange (the
"NYSE"), otherwise in the over-the-counter market or otherwise at prices and at
terms prevailing at the time of sale, at prices related to the then current
market price or in negotiated transactions. The Company will not receive any of
the proceeds from the sale of the shares of Common Stock by the Selling
Stockholders. All of the shares of the Common Stock owned by the Selling
Stockholders have been "restricted securities" under the Securities Act of 1933,
as amended (the "Securities Act"), prior to their registration hereunder.
In transactions effective as of January 27, 1997, the Company issued an
aggregate of 432,881 shares of the Common Stock to the Selling Stockholders for
all of the outstanding capital stock of NAPTech, Inc. ("NAPTech") and certain
real estate and buildings of a NAPTech-related entity, Freeport Properties, L.C.
Pursuant to an agreement between the Company and the Selling Stockholders, the
Company agreed to prepare and file a shelf registration statement on Form S-3
with the Securities and Exchange Commission (the "Commission") to register the
offering of the shares of Common Stock covered hereby. This Prospectus has been
prepared for use in connection with future sales of the shares of Common Stock
by the Selling Stockholders under the shelf registration statement on Form S-3.
For more information concerning the Selling Stockholders and related matters,
see "Selling Stockholders and Plan of Distribution." The shares of Common Stock
may be sold from time to time by the Selling Stockholders pursuant to this
Prospectus or in transactions exempt from the registration requirements of the
Securities Act. In connection with any sales, the Selling Stockholders and any
brokers participating in such sales may be deemed to be "underwriters" within
the meaning of the Securities Act. See "Selling Stockholders and Plan of
Distribution". Outstanding shares of Common Stock of the Company are listed on
the NYSE under the symbol "SGR".
See "Risk Factors" for a discussion of certain factors that should be
considered by prospective purchasers of the Common Stock offered hereby.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is July 16, 1997.
<PAGE>
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
August 31, 1996;
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
November 30, 1996;
(c) The Company's Quarterly Report on Form 10-Q for the quarter ended
February 28, 1997;
(d) The Company's Quarterly Report on Form 10-Q for the quarter ended
May 31, 1997;
(e) The Company's Current Report on Form 8-K dated February 11, 1997,
as amended by Amendment No.1 on Form 8-K/A-1 dated April 9, 1997;
(f) The Company's Current Report on Form 8-K dated June 17, 1997;
(g) The Company's Proxy Statement dated December 31, 1996 in
connection with the Company's Annual Meeting of Shareholders held
on January 29, 1997; and
(h) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A (including any
amendments or reports filed for the purpose of updating such
description).
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the Common Stock pursuant hereto
shall be deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the date of the filing of such documents. Any statement
contained in this Prospectus or in a document incorporated or deemed to be
incorporated by reference in this Prospectus shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus or in any other subsequently filed document that
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company undertakes to provide without charge to each person to whom a
copy of this Prospectus has been delivered, upon the written or oral request of
any such person, a copy of any or all of the documents incorporated by reference
herein, other than the exhibits to such documents, unless such exhibits are
specifically incorporated by reference into the information that this Prospectus
incorporates. Written or oral requests for such copies should be directed to the
Company's executive offices at 11100 Mead Road, Second Floor, Baton Rouge,
Louisiana 70816, Attention: Secretary (telephone number: (504) 296-1140).
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission can be
inspected at the Public Reference Section of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and the
Regional Offices of the Commission at Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511, and 7 World Trade Center, New York,
New York 10048. Copies of such material can also be obtained from the Public
Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a World Wide Web site on the Internet at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants that
2
<PAGE>
file electronically with the Commission. Such reports, proxy and information
statements and other information concerning the Company can also be inspected
and copied at the offices of the NYSE, 20 Broad Street, New York, New York
10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act with respect to the Common Stock offered hereby.
This Prospectus, which constitutes a part of the Registration Statement, does
not contain all of the information set forth in the Registration Statement,
certain items of which are contained in exhibits to the Registration Statement
as permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the Common Stock offered hereby,
reference is made to the Registration Statement, including the exhibits thereto.
Statements made in this Prospectus concerning the contents of any document
referred to herein are not necessarily complete. With respect to each such
document filed with the Commission as an exhibit to the Registration Statement,
the material terms of each such document are set forth in this Prospectus.
However, reference is made to the exhibit for a more complete description of the
matter involved, and each such statement shall be deemed qualified in its
entirety by such reference.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK
This Prospectus, including the information incorporated by reference,
contains forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act. These forward-looking
statements are based largely on the Company's expectations and are subject to a
number of risks and uncertainties, certain of which are beyond the Company's
control. Actual results could differ materially from these forward-looking
statements as a result of the factors described in this Prospectus including,
but not limited to, (i) adverse economic conditions; (ii) the impact of
competitive products and pricing; (iii) product demand and acceptance risks;
(iv) the presence of competitors with greater financial resources; (v) costs and
financing difficulties; and (vi) delays or difficulties in the production,
delivery or installation of products, including a lengthy strike or other work
stoppage by the Company's union employees at any of the Company's facilities.
See "Risk Factors." In light of these risks and uncertainties, there can be no
assurance that actual results will be as projected in the forward-looking
statements.
THE COMPANY
Shaw is a leading supplier of industrial piping systems for new
construction and retrofit projects throughout the world, primarily for the
electric power, refining and chemical industries. Shaw is committed to being the
"total piping resource" for its customers by offering comprehensive design and
engineering services, piping system fabrication, construction and maintenance
services, manufacturing and sale of specialty pipe fittings and design and
fabrication of pipe support systems.
The Company was founded in 1987 by current management and subsequently
purchased the assets of Benjamin F. Shaw Company, a century-old pipe fabricator.
The Company has increased its revenues from $29.3 million in fiscal 1988 to
$222.0 million in fiscal 1996, both increasing its domestic and international
businesses. Through internal expansion and a series of strategic acquisitions,
the Company has expanded its fabrication capacity, increased its bending
capabilities and broadened its piping system products and services.
The Company's principal executive offices are located at 11100 Mead Road,
Baton Rouge, Louisiana 70816, telephone: (504) 296-1140.
RISK FACTORS
Prospective purchasers of the Common Stock offered hereby should carefully
consider the following risk factors, together with the information provided
elsewhere in this Prospectus (or incorporated herein by reference), in
evaluating an investment in the Common Stock.
Cyclicality of Customer Projects
The demand for the Company's products and services depends primarily on the
existence of construction and retrofit projects, particularly in the electric
power, refining and chemical industries. These industries historically have
been, and will
3
<PAGE>
likely continue to be, cyclical in nature and vulnerable to general downturns in
the economy. The Company's results of operations may vary depending on the
availability of future projects from such industries.
Dependence on Major Customers
Projects in the electric power, refining and chemical industries frequently
involve a lengthy and complex bidding and selection process, and the ability of
the Company to obtain future contracts is difficult to predict. Because a
significant portion of the Company's sales is generated from large projects, its
results of operations can fluctuate from quarter to quarter. For fiscal 1996,
affiliates of Mitsubishi Heavy Industries Ltd. accounted for 12.3% of the
Company's sales. While a concentration of customers has been historically
prevalent, because of the nature of the Company's business, the significant
customers vary between years.
Raw Materials and Suppliers
The Company's principal raw materials are carbon steel, stainless and other
alloy piping, which it obtains from a number of domestic and foreign primary
steel producers. The Company believes that it is not generally dependent upon
any one of its suppliers for raw materials and, that the market is extremely
competitive and its relationship with its suppliers is good. Certain types of
raw materials, however, are available from only one or a few specialized
suppliers. Although the Company has not experienced any significant sourcing
problems to date, there can be no assurance that sourcing problems will not
occur in the future. And, to the extent a sourcing problem does occur, the
Company's ability to complete a project in a timely fashion or at a profit may
be jeopardized and ultimately result in a loss. Furthermore, because of the
volume of piping materials purchased, the Company is often able to negotiate
advantageous purchase prices therefor. As a result, if a manufacturer is unable
to deliver the materials pursuant to the negotiated terms, the Company may be
required to purchase the materials from another source at a higher price, which
may reduce the profit to be realized or possibly result in a loss on a project
for which such materials were needed.
Potential for Product Liability and Warranty Claims
Certain of the Company's products are used in potentially hazardous
environments, including without limitation, nuclear facilities. Any catastrophic
occurrences in excess of insurance limits at locations where the Company's
products are used could in the future result in significant product liability
claims against the Company.
In addition, the Company under certain contracts must use new metals or
processes for producing or fabricating pipe for its customers, and the failure
of any such metals or processes could result in significant replacement or
reworking costs on a project. In the fourth quarter of fiscal 1994 and the first
quarter of fiscal 1995, the Company, at a customer's request, engaged in the
significant reworking of a project. Warranty claims against the Company could in
the future result in significant reworkings.
Risks Associated with Competition
The Company's competition in the supply and fabrication of piping systems
generally consists of a number of pipe fabricators domestically and divisions of
large industrial firms in the international sector. Some of the competitors,
especially in the international sector, have greater financial and other
resources than the Company.
Risks Associated with Growth of Core Business and Integration of Acquired
Businesses
In the past few years, the Company has experienced substantial growth
through internal expansion and acquisitions, and the Company plans to continue
to grow in this manner. This growth, and the resulting need to integrate
acquired companies into the Company's operations economically and efficiently,
has required, and will continue to require, significant management, production,
technical, financial and other resources. Due to a substantial increase in
sales, the Company has experienced, and is continuing to experience, billing
delays. There can be no assurance that the Company will be able to manage this
growth
4
<PAGE>
effectively or to integrate fully the operations of any acquired company into
the Company, and any failure to do so could have a material adverse effect on
the Company's results of operations or financial condition, or both.
Risks Associated with International Contracts, Operations and Expansion; Foreign
Exchange Risk
To date, a substantial portion of the Company's sales and earnings have
been attributable to its sales to and operations in international markets, and
the Company expects international sales and operations to increase and
substantially contribute to the Company's growth and earnings for the
foreseeable future. The success of the Company's sales to, operations in and
expansion into international markets depends on numerous factors, many of which
are beyond its control. Such factors include, but are not limited to, economic
conditions in the foreign countries in which the Company operates and to which
it sells its products and services and the lack of well-developed legal systems
in certain of such countries. In addition, international contracts, operations
and expansion may increase the Company's exposure to certain risks inherent in
doing business outside the United States, including currency fluctuations,
restrictions on the repatriation of profits and assets, compliance with foreign
laws and standards and political risks. The Company attempts to minimize its
foreign exchange risks, primarily through denominating contracts in United
States dollars or the inclusion of escalation provisions in contracts, or both.
The Company from time to time enters into contracts denominated in a foreign
currency without escalation provisions, thereby subjecting itself to foreign
exchange risks. The Company generally does not obtain such insurance or hedge
such risks. In addition, the Company's ability to obtain international contracts
is impacted by the relative strength or weakness of the United States dollar
relative to foreign currencies.
During the last several years, Venezuela has been experiencing a monetary
and economic crisis. In response, the Venezuelan government imposed, among other
things, foreign exchange controls that affected the Company's ability to
repatriate profits from the joint venture or otherwise convert local currency
into United States dollars. Given Venezuela's lack of economic stability, the
Company believes that its investment in Venezuela may be at risk from future
foreign exchange and repatriation restrictions. There can be no assurance that
the Venezuelan operations will be profitable.
Fixed Price Contract Exposure
Substantially all of the Company's international projects are quoted on a
"fixed" or "lump-sum" price basis. To the extent that the Company is unable to
secure fixed pricing commitments from its suppliers at the time such a contract
is entered into and experiences cost increases for materials or labor during the
performance of such a contract, the Company's profit for such project could
decrease, or the Company could experience a loss with respect to such contract
that could have a material adverse effect on the Company's results of operations
or financial condition, or both.
Control by Management
At May 31, 1997, the officers and directors of the Company and its
subsidiaries beneficially owned approximately 53% of the outstanding Common
Stock but controlled approximately 24% of the voting power. Consequently, these
persons will be able to exercise effective control over corporate actions and
the outcomes of matters requiring a shareholder vote, including the election of
directors.
Voting Rights Tied to Duration of Stock Ownership; Anti-Takeover Effects
The Company's Restated Articles of Incorporation provide that each share of
Common Stock that has been held by the same person for at least four consecutive
years is entitled to five votes on each matter to be voted upon at shareholders'
meetings, and all shares held for less than four years are entitled to one vote
per share for each such matter. This charter provision could concentrate control
in existing shareholders of the Company, increase the difficulty of removing the
incumbent Board of Directors or management, diminish the likelihood that a
potential buyer would make an offer for the Common Stock, and impede a
transaction favorable to the interests of certain shareholders. Each purchaser
of shares of Common Stock offered hereby will be entitled to one vote for each
such share at all shareholders' meetings until such shares have been, in
accordance with the Company's Restated Articles of Incorporation, continuously
owned for a period of four years, in which case the holder
5
<PAGE>
will be entitled to five votes for each share on all matters submitted to
shareholders. See "Description of Capital Stock -- Common Stock".
Dependence on Key Management
The success of the Company's business will be materially dependent upon the
continued services of its founder, Chairman, President and Chief Executive
Officer, J.M. Bernhard, Jr., and other key officers and employees. The loss of
Mr. Bernhard or such other key personnel due to death, disability or termination
of employment could have a material adverse effect on the Company's results of
operations or financial condition, or both.
Possible Work Stoppage
Certain of the Company's employees in the United States are represented by
the United Association of Journeymen and Apprentices of the Plumbing and
Pipefitting Industry of the United States and Canada, AFL-CIO (the "Union"). The
Company experienced a Union-initiated work stoppage of five days in 1992
relating to the expiration and renegotiation of a collective bargaining
agreement covering the Company's B.F. Shaw, Inc. subsidiary in Laurens, South
Carolina. The collective bargaining agreement and the Union regarding the South
Carolina facility was to have expired on November 30, 1996. The agreement has
been extended indefinitely, but either the Company or the Union may cancel the
agreement on ten business days prior written notice.
The collective bargaining agreements covering two of the Company's other
facilities located in Walker and Prairieville, Louisiana were terminated by the
Union effective February 5, 1997, and certain members thereafter exercised their
right to strike as of that date. The strike continues as of the date of this
Prospectus. Despite the strike, operations at both facilities continue and the
Company does not expect any material impact on production as a result.
Notwithstanding the lack of impact of the present strike on the Company's
operations, a lengthy strike or other work stoppage at any of the Company's
facilities could have a material adverse effect on the Company's results of
operations or financial condition, or both.
Risks Associated with Issuance of Preferred Stock
The Company has available for issuance 5,000,000 shares of Preferred Stock,
no par value, which the Board of Directors of the Company is authorized to
issue, in one or more series, without any further action on the part of
shareholders. In the event the Company issues a series of preferred stock in the
future that has preference over the Common Stock with respect to the payment of
dividends and upon the Company's liquidation, dissolution or winding up, the
rights of the holders of Common Stock offered hereby could be adversely
affected. See "Description of Capital Stock -- Preferred Stock". In addition,
such an issuance could adversely impact the market price of the outstanding
common stock.
Anti-Takeover Effects of Certain Charter and Bylaw Provisions and Louisiana Law
Certain provisions of the Restated Articles of Incorporation and Amended
and Restated By-Laws of the Company and certain provisions of Louisiana law may
tend to deter potential unsolicited offers or other efforts to obtain control of
the Company that are not approved by the Board of Directors. Such provisions may
therefore deprive the shareholders of the Company of opportunities to sell
shares of Common Stock at prices higher than prevailing market prices. See
"Description of Capital Stock -- Louisiana Fair Price and Control Acquisition
Shares", "-- Classified Board of Directors", "-- Advance Notice Provisions for
Certain Shareholder Actions", and "-- Super Majority Provisions".
Volatility of Stock Price
In the past, the Company has experienced significant fluctuations in the
market price of its Common Stock, and, in the future, the market price of the
Common Stock may experience fluctuations that are unrelated to the operating
performance of the Company, such as market conditions generally and developments
specifically related to the industrial piping industry. Additionally, the volume
of daily trading in the Common Stock to date has been limited, and, as a result,
the sale of a
6
<PAGE>
significant number of shares of Common Stock by one or more shareholders within
a relatively short time period could adversely affect the market price for the
Common Stock.
Absence of Dividends
The Company has not paid any dividends on the Common Stock and currently
anticipates that, for the foreseeable future, any earnings will be retained for
the development of the Company's business. In addition, the Company is subject
to certain prohibitions on the payment of dividends under the terms of existing
credit facilities.
USE OF PROCEEDS
The shares of Common Stock offered hereby are being offered by the Selling
Stockholders. See "Selling Stockholders and Plan of Distribution". The Company
will not receive any of the proceeds from the sale of the Common Stock by the
Selling Stockholders.
SELLING STOCKHOLDERS AND PLAN OF DISTRIBUTION
The 432,881 shares of Common Stock (the "Shares") being registered under
the shelf registration statement of which this Prospectus forms a part were
acquired by the Selling Stockholders in connection with the acquisition by the
Company of all of the outstanding capital stock of NAPTech, Inc. ("NAPTech") and
certain real estate and buildings of a NAPTech-related entity, Freeport
Properties, L.C. ("Freeport"). Of the aggregate 432,881 shares being registered
hereby, 43,288 shares (approximately 10% of the shares issued to each of the
Selling Stockholders) are being held in escrow to secure the indemnification
obligations of the Selling Stockholders pursuant to the acquisition agreements
by which the stock of NAPTech and the land and buildings of Freeport were
acquired. In connection with the transactions described above, the Company
agreed to file a registration statement with the Commission for the Shares and
the Company did file such registration statement on July 1, 1997. The Shares
are being registered to facilitate their sale under the Securities Act. Pursuant
to such registration statement, the Selling Stockholders may choose to sell all
or a portion of the Shares from time to time in transactions reported on the
NYSE, in the over-the-counter market or otherwise at prices and at terms then
prevailing or at prices related to the then current market price, or in
negotiated transactions. The table below reflects the number of shares of Common
Stock owned prior to the offering, the number of shares being offered hereby for
the Selling Stockholders account, and the percentage of outstanding shares to be
held by them following completion of the offering. Although the following table
is presented on the assumption that all of the Selling Stockholders will sell
all of their shares, the Company cannot predict whether this in fact will occur
(and the Selling Stockholders have indicated that they do not presently intend
to sell all of their shares of Common Stock), the timing or amount of any actual
sales, or the impact thereof or the market price of the Company's Common Stock.
In connection with the transactions, Bradford J. Brower and Greg R. Cowley
entered into employment agreements with NAPTech. As of the date of this
Prospectus, the employment of each of Messrs. Brower and Cowley had been
terminated by NAPTech.
<TABLE>
<CAPTION>
Beneficial Ownership Before Beneficial Ownership After
the Offering the Offering1
Name of Selling Stockholder
<S> <C> <C> <C> <C> <C>
Shares to be Sold
Shares Percent2 Shares Percent2
Bradford J. Brower 112,728 * 112,728 -- --
Freeport Properties, L.C. 83,333 * 83,333 -- --
Robertson Family Trust 36,493 * 36,493 -- --
Robert A. Schroeder 37,996 * 37,996 -- --
NUPETCO Associates, A Utah Limited 35,864 * 35,864 -- --
Partnership
7
<PAGE>
GES Investments, L.C. 34,046 * 34,046 -- --
SRW Investments, L.C. 34,046 * 34,046 -- --
Ballard Investment Company 28,698 * 28,698 -- --
Richard I. & Judith A. Winwood 18,946 * 18,946 -- --
Richard Winwood 4,474 * 4,474 -- --
Prudential Securities 734 * 734 -- --
Greg R. Cowley 17,9413 * 3,600 14,341 *
BB & GC Enterprises, L.L.C. 1,923 * 1,923 -- --
========================================== ================ =============== ===================== =============== ===============
</TABLE>
1Assumes the Selling Stockholders sell all of their shares of Common Stock,
which they may or may not do. 2Less than 1%. The number of shares of Common
Stock outstanding as of May 31, 1997 was 12,451,518. 3Includes (i) 3,585 shares
acquired upon the exercise of an option as of February 20, 1997, which option
had been issued by the Company to replace an option to acquire NAPTech capital
stock and (ii) 10,756 shares that may be acquired upon the exercise of an option
that is presently exercisable, which option had also been issued by the Company
to replace an option to acquire NAPTech capital stock.
The Shares owned by the Selling Stockholders may be sold from time to time
by the Selling Stockholders, on one or more exchanges or in the over-the-counter
market, or otherwise at prices and on terms then prevailing or at prices then
related to the then current market price, or in negotiated transactions. The
Shares may be sold by or through broker-dealers in one or more of the following
transactions: (a) block trades in which the broker or dealer so engaged will
attempt to sell the Shares as agent but may position and resell a portion of the
block as principal to facilitate any transaction, (b) purchases by a broker or
dealer as principal and resale by such broker or dealer for its account pursuant
to the Registration Statement relating thereto, and (c) ordinary brokerage
transactions and transactions in which the broker solicits purchasers. In
effecting sales, brokers and dealers engaged by the Selling Stockholders may
arrange for other brokers or dealers to participate. Brokers or dealers will
receive commissions or discounts from the Selling Stockholders in amounts to be
negotiated (and, if such broker-dealer acts as agent for the purchaser of such
shares, from such purchaser). Broker-dealers may agree with the Selling
Stockholders to sell a specified number of Shares at a stipulated price per
Share, and, to the extent such a broker-dealer is unable to do so acting as
agent for a Selling Stockholders, to purchase as principal any unsold shares at
the price required to fulfill the broker-dealer commitment to such Selling
Stockholder. Broker-dealers who acquire Shares as principal may thereafter
resell such Shares from time to time in transactions (which may involve crosses
and book transactions and which may involve sales to and through other
broker-dealers, including transactions, of the nature described above) in the
over-the-counter market, in negotiated transactions or otherwise, at market
prices prevailing at the time of sale or at negotiated prices, and in connection
with such resales may pay to or receive from the purchasers of such Shares
commissions as described above. Pursuant to the registration agreement entered
into in connection with the transactions described above, the Company has agreed
to indemnify the Selling Stockholders against certain liabilities, including
liabilities under the Securities Act.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 50,000,000 shares
of Common Stock, no par value; and 5,000,000 shares of Preferred Stock, no par
value. The following summary of certain provisions of the Company's capital
stock describes all material provisions of, but does not purport to be complete
and is subject to and is qualified in its entirety by, the Restated Articles of
Incorporation and the Amended and Restated By-Laws of the Company that are
incorporated herein by reference as exhibits to the Registration Statement of
which this Prospectus forms a part and by the provisions of applicable law.
Common Stock
8
<PAGE>
At May 31, 1997, there were 12,451,518 shares of Common Stock outstanding.
In addition, at May 31, 1997, 689,165 shares of Common Stock are reserved for
issuance pursuant to the Company's 1993 Employee Stock Option Plan and 50,000
shares of Common Stock are reserved under the Company's 1996 Non-Employee
Director Stock Option Plan (the "Director Plan"). Cumulative voting is
prohibited in the election of directors. The holders of Common Stock are
entitled to receive ratably such dividends, if any, as may be declared from time
to time by the Board of Directors out of funds legally available therefor. 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, and subject to any
prior rights of any holders of preferred stock that at the time may be
outstanding. The Common Stock is not redeemable, does not have any conversion
rights and is not subject to call. Holders of shares of Common Stock have no
preemptive rights to maintain their respective percentage of ownership in future
offerings or sales of stock by the Company. The shares of Common Stock presently
outstanding are fully paid and non-assessable. The Company delisted the Common
Stock from the Nasdaq National Market on October 17, 1996, and the Common Stock
commenced trading on the NYSE under the symbol "SGR" on October 18, 1996.
Each outstanding share of Common Stock will entitle the holder thereof to
five votes on each matter properly submitted to the shareholders of the Company
for their vote, waiver, release or other action; except that no holder of
outstanding shares of Common Stock will be entitled to exercise more than one
vote on any such matter in respect of any share of Common Stock with respect to
which there has been a change in beneficial ownership during the four years
immediately preceding the date on which a determination is made of the
shareholders of the Company who are entitled to vote or to take any other
action. A change in beneficial ownership of an outstanding share of Common Stock
will be deemed to have occurred whenever a change occurs in any person or
persons who, directly or indirectly, through any contract, agreement,
arrangement, understanding, relationship or otherwise has or shares any of the
following:
(a) voting power, which includes, without limitation, the right to vote or
the power to direct the voting power of such share of Common Stock;
(b) investment power, which includes, without limitation, the power to
direct the sale or other disposition of such share of Common Stock;
(c) the right to receive or to retain the proceeds of any sale or other
disposition of such share of Common Stock; or
(d) the right to receive or to retain any distributions, including, without
limitation, cash dividends, in respect of such share of Common Stock.
Without limiting the generality of the foregoing, the following events or
conditions will be deemed to involve a change in beneficial ownership of a share
of Common Stock:
(a) in the absence of proof to the contrary provided in accordance with
certain procedures set forth below, a change in beneficial ownership will be
deemed to have occurred (i) whenever an outstanding share of Common Stock is
transferred of record into the name of any other person, and (ii) upon the
issuance of shares in a public offering;
(b) in the case of an outstanding share of Common Stock held of record in
the name of a corporation, general partnership, limited partnership, voting
trustee, bank, trust company, broker, nominee or clearing agency, if it has not
been established pursuant to the procedures set forth below that there has been
no change in the person or persons who or that direct the exercise of the rights
referred to in (a) through (d), inclusive, above with respect to such
outstanding share of Common Stock during the four years immediately preceding
the date on which a determination is made of the shareholders of the Company
entitled to vote or to take any other action, then a change in beneficial
ownership of such share of Common Stock shall be deemed to have occurred during
such period;
(c) in the case of an outstanding share of Common Stock held of record in
the name of any person as a trustee, agent, guardian or custodian under the
Uniform Gifts to Minors Act as in effect in any jurisdiction, a change in
beneficial ownership will be deemed to have occurred whenever there is a change
in the beneficiary of such trust, the principal of such agent, the ward of such
guardian, the minor for whom such custodian is acting or a change in such
trustee, agent, guardian or custodian; or
9
<PAGE>
(d) in the case of outstanding shares of Common Stock beneficially owned by
a person or group of persons, who, after acquiring, directly or indirectly, the
beneficial ownership of 5% of the outstanding shares of Common Stock, fails to
notify the Company of such ownership within ten days after such acquisition, a
change in beneficial ownership of such shares of Common Stock will be deemed to
occur on each day while such failure continues.
Notwithstanding any other provisions in the Company's Restated Articles of
Incorporation to the contrary, no change in beneficial ownership of an
outstanding share of Common Stock shall be deemed to have occurred solely as a
result of:
(a) any transfer of any interest in an outstanding share of Common Stock
pursuant to a bequest or inheritance, by operation of law upon the death of any
individual or by any other transfer without valuable consideration, including,
without limitation, a gift that is made in good faith and not for the purpose of
circumventing the provisions of the Company's Restated Articles of
Incorporation;
(b) any changes in beneficiary of any trust, or any distribution of an
outstanding share of Common Stock from trust, by reason of the birth, death,
marriage or divorce of any natural person; the adoption of any natural person
prior to age 18; or the passage of a given period of time or the attainment by
any natural person of a specific age; or the creation or termination of any
guardianship or custodial arrangement;
(c) any appointment of a successor trustee, agent, guardian or custodian
with respect to an outstanding share of Common Stock if neither such successor
has nor its predecessor had the power to vote or to dispose of such share of
Common Stock without further instructions from others;
(d) any change in the person to whom dividends or other distributions in
respect of an outstanding share of Common Stock are to be paid pursuant to the
issuance or modification of a revocable dividend payment order;
(e) any issuance of a share of Common Stock by the Company or any transfer
by the Company of a share of Common Stock held in treasury other than in a
public offering thereto, unless otherwise determined by the Board of Directors
at the time of authorizing such issuance or transfer;
(f) any giving of a proxy in connection with a solicitation of proxies
subject to the provisions of Section 14 of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder promulgated;
(g) any transfer, whether or not with consideration, among individuals
related or formerly related by blood, marriage or adoption ("relatives") or
between a relative and any person controlled by one or more relatives where the
principal purpose for the transfer is to further the estate tax planning
objectives of the transferor or of relatives of the transferor;
(h) any appointment of a successor trustee as a result of the death of the
predecessor trustee (which predecessor trustee shall have been a natural
person);
(i) any appointment of a successor trustee who or which was specifically
named in a trust instrument prior to the effective date of this Offering; or
(j) any appointment of a successor trustee as a result of the resignation,
removal or failure to qualify of a predecessor trustee or as a result of
mandatory retirement pursuant to the express terms of a trust instrument;
provided, that less than 50% of the trustees administering any single trust will
have changed (including in such percentage the appointment of the successor
trustee) during the four-year period preceding the appointment of such successor
trustee.
10
<PAGE>
All determinations concerning changes in beneficial ownership, or the
absence of any such change, are made by the Board of Directors of the Company
or, at any time when the Company employs a transfer agent with respect to the
shares of Common Stock, at the Company's request, by such transfer agent on the
Company's behalf. Written procedures designated to facilitate such
determinations are to be established and may be amended, from time to time, by
the Board of Directors. Such procedures will provide, among other things, the
manner of proof of facts that will be accepted and the frequency with which such
proof may be required to be renewed. The Company and any transfer agent will be
entitled to rely on any and all information concerning beneficial ownership of
the outstanding shares of Common Stock coming to their attention from any source
and in any manner reasonably deemed by them to be reliable, but neither the
Company nor any transfer agent shall be charged with any other knowledge
concerning the beneficial ownership of outstanding shares of Common Stock.
In the event of any stock split or stock dividend with respect to the
outstanding shares of Common Stock, each share of Common Stock acquired by
reason of such split or dividend will be deemed to have been beneficially owned
by the same person from the same date as that on which beneficial ownership of
the outstanding share or shares of Common Stock, with respect to which such
share of Common Stock was distributed, was acquired.
Each outstanding share of Common Stock, whether at any particular time the
holder thereof is entitled to exercise five votes or one vote, shall be
identical to all other shares of Common Stock in all respects, and together the
outstanding shares of Common Stock will constitute a single class of shares of
the Company.
Preferred Stock
The Board of Directors is authorized to provide for the issuance of
5,000,000 shares of Preferred Stock in one or more series and to fix the number
of shares constituting any such series, the voting powers, designations,
preferences and relative, participating, optional or other special rights and
qualifications, limitations or restrictions thereof, including the dividend
rights, dividend rate, terms of redemption, redemption price or prices,
conversion rights and liquidation preferences of the shares constituting any
series, without any further vote or action by the shareholders of the Company.
The issuance of Preferred Stock by the Board of Directors could adversely affect
the rights of holders of Common Stock. For example, issuance of Preferred Stock
could result in a series of securities outstanding that would have preferences
over the Common Stock with respect to dividends and in liquidation and that
could (upon conversion or otherwise) enjoy all of the rights appurtenant to the
Common Stock. The authority possessed by the Board of Directors to issue
Preferred Stock could potentially be used to discourage attempts by others to
obtain control of the Company through merger, tender offer, proxy, consent or
otherwise by making such attempts more difficult to achieve or more costly. The
Board of Directors may issue Preferred Stock without shareholder approval and
with voting and conversion rights which could adversely affect the voting power
of holders of Common Stock. There are no agreements or understandings for the
issuance of Preferred Stock, and the Board of Directors has no present intention
to issue any shares of Preferred Stock.
Louisiana Fair Price and Control Acquisition Statutes
Under Louisiana law, the acquisition of voting power (a "control share
acquisition") of an "issuing public corporation" that results in the purchaser
acquiring voting power in excess of 20%, 331/3% or 51% of the total voting power
of the issuing public corporation requires approval of a majority of the voting
power of the issuing public corporation and each class entitled to vote
separately on the proposal, excluding the shares of the acquiring person, any
officer of the issuing public corporation and any employee of the issuing public
corporation who is also a director of such corporation. Shares acquired in a
control share acquisition without such approval will have no voting rights and
under certain circumstances may be subject to a redemption by the corporation.
The restrictions imposed under such law are applicable to all Louisiana
corporations that fall within the definition of an "issuing public corporation"
(as does the Company) unless the issuing public corporation's articles of
incorporation or by-laws, as in effect before the acquisition has occurred,
provide that such provisions do not apply. The Company's Restated Articles of
Incorporation and Amended and Restated By-Laws do not contain such a provision;
therefore, the above restrictions contained in Louisiana law do apply to the
Company.
11
<PAGE>
In addition, if certain elections were to be made by the Company's Board of
Directors under the Louisiana Business Corporation Law, unless certain price and
procedural requirements are met, certain business combinations involving the
Company and any holder of 20% or more of the Company's outstanding voting stock
may be required to be approved by at least (i) 80% of the votes entitled to be
cast by holders of the outstanding voting stock and (ii) two-thirds of the votes
entitled to be cast by the holders of voting stock other than the voting stock
held by such holder. This provision could be regarded as a deterrent to a
takeover of the Company and could be applied selectively by the Board of
Directors.
Limitation of Director and Officer Liability
The Company's Restated Articles of Incorporation contain provisions which
eliminate the personal liability of its directors and officers for monetary
damages resulting from breaches of their fiduciary duty other than liability for
breaches of the duty of loyalty, acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, for violations
under Section 92(D) of the Louisiana Business Corporation Law or any transaction
from which the director or officer derived an improper personal benefit. The
Restated Articles of Incorporation contain provisions requiring the
indemnification of the Company's directors and officers to the fullest extent
permitted by Section 83 of the Louisiana Business Corporation Law, including
circumstances in which indemnification is otherwise discretionary. The Company
agents believe that these provisions are necessary to attract and retain
qualified persons as directors and officers.
Classified Board of Directors
The Company's Restated Articles of Incorporation provide that if the number
of directors constituting the entire Board of Directors is increased to twelve
or more members, then at the next meeting of shareholders at which directors are
to be elected, the Board of Directors shall be divided into three classes, the
members of which will serve staggered three-year terms. The Company believes
that a classified board of directors could help to assure the continuity and
stability of the Board's and Shaw's business strategies and policies as
determined by the Board of Directors. The classified board provision, if
implemented, could have the effect of making the removal of incumbent directors
more time-consuming and, therefore, discouraging a third party from making a
tender offer or otherwise attempting to obtain control of Shaw, even though such
an attempt might be beneficial to Shaw and its shareholders. Thus, the
classified board provision could increase the likelihood that incumbent
directors would retain their positions.
Advance Notice Provisions for Certain Shareholder Actions
The Company's Amended and Restated By-Laws establish an advance notice
procedure with regard to the nomination, other than by or at the direction of
the Board or a committee thereof, of candidates for election as directors (the
"Nomination Procedure") and with regard to certain matters to be brought before
an annual meeting of shareholders of the Company (the "Business Procedure").
Under the Business Procedure, a shareholder seeking to have any business
conducted at an annual meeting must give prior written notice, in proper form,
to the Secretary of the Company. The requirements as to the form and timing of
that notice are specified in the Company's Amended and Restated By-Laws. If the
Chairman or other officer presiding at a meeting determines that other business
was not properly brought before such meeting in accordance with the Business
Procedure, such business will not be conducted at the meeting.
The Nomination Procedure requires that a shareholder give prior written
notice, in proper form, of a planned nomination for the Company's Board of
Directors to the Secretary of the Company. The requirements as to the form and
timing of that notice are specified in the By-Laws. If the election inspectors
determine that a person was not nominated in accordance with the Nomination
Procedure, such person will not be eligible for election as a director.
Although the By-Laws do not give the Board of Directors any power to
approve or disapprove shareholder nominations for the election of directors or
of any other business desired by shareholders to be conducted at an annual or
any other meeting, the Company's Amended and Restated By-Laws (i) may have the
effect of precluding a nomination for the election of directors or precluding
the conduct of business at a particular annual meeting if the proper procedures
are not followed, or (ii) may discourage or deter a third party from conducting
a solicitation of proxies to elect its own slate of directors or otherwise
12
<PAGE>
attempting to obtain control of the Company, even if the conduct of such
solicitation or such attempt might be beneficial to the Company and its
shareholders.
Super Majority Provisions
The Company's Restated Articles of Incorporation contain provisions
requiring the affirmative vote of the holders of at least 75% of voting power of
the Company's capital stock to amend certain provisions of the Articles,
including provisions relating to the removal of directors.
The Company's Restated Articles of Incorporation require the approval of
the holders of at least 75% of the Company's outstanding shares of Common Stock,
not including shares held by a Related Person (as defined below), to approve
certain Business Combinations (as defined below) and related transactions. The
term "Related Person" is defined to include any individual, corporation,
partnership or other entity which owns beneficially, directly or indirectly,
more than 5% of the outstanding shares of Common Stock of the Company. The term
"Business Combination" is defined to include, among other things, (i) any merger
or consolidation of the Company or a subsidiary of the Company which constitutes
more than 50% of the assets of the Company, other than a merger or consolidation
which results in the voting securities of the Company outstanding immediately
prior thereto continuing to represent more than 50% of the combined voting power
of the voting securities of the surviving entity; (ii) any sale, lease,
exchange, transfer or other disposition of more than 50% of the assets of the
Company; (iii) any reclassification of the Common Stock of the Company; and (iv)
any liquidation or dissolution of the Company.
Transfer Agent and Registrar
The transfer agent and registrar for the Common Stock is First Union
National Bank, Charlotte, North Carolina.
LEGAL MATTERS
The legality of the shares of Common Stock offered hereby will be passed
upon for the Company by the law firm of Kantrow, Spaht, Weaver & Blitzer (A
Professional Law Corporation), P.O. Box 2997, Baton Rouge, Louisiana, 70821. As
of March 31, 1997, members of the firm of Kantrow, Spaht, Weaver & Blitzer (A
Professional Law Corporation) owned, directly or indirectly, approximately 100
shares of the Company's Common Stock.
EXPERTS
The consolidated financial statements of The Shaw Group Inc. included and
incorporated by reference in this Prospectus have been audited by Arthur
Andersen LLP and Hannis T. Bourgeois & Co., L.L.P., independent public
accountants, as indicated in their reports with respect thereto, and are
included and incorporated by reference herein in reliance upon the authority of
such firms as experts in accounting and auditing. The single jointly signed
auditor's report is considered to be the equivalent of two separately signed
auditor's reports. Thus, each firm represents that it has complied with
generally accepted auditing standards and is in a position that would justify
being the only signatory of the report.
13
<PAGE>
<TABLE>
<CAPTION>
========================================================================= =================================================
<S> <C>
No dealer, salesman or any other person has been
authorized to give any information or to make any
representations in connection with this offering other than 432,881 Shares
those contained in this Prospectus and, if given or made, such
other information or representations must not be relied upon
as having been so authorized by the Company. This
Prospectus does not constitute an offer of any securities other The Shaw Group Inc.
than those to which it relates or any offer to sell, or a
solicitation of an offer to buy, other than those to which it
relates, in any jurisdiction to any person to whom it is not Common Stock
lawful to make such offer in such jurisdiction. Neither the
delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that
there has not been a change in the facts set forth in this
Prospectus or the affairs of the Company since the date
hereof or that the information herein is correct as of any time
subsequent to the date hereof.
-----------------
TABLE OF CONTENTS PROSPECTUS
Page
Incorporation of Certain Documents
by Reference...................................... 2
Available Information............................... 2
The Company......................................... 3
Risk Factors........................................ 3
Use of Proceeds..................................... 7
Selling Stockholders and Plan of
Distribution...................................... 7 July 16, 1997
Description of Capital Stock........................ 8
Legal Matters....................................... 13
Experts............................................. 13
-------------------
======================================================================= ===================================================
</TABLE>
