SC 13D: Schedule filed to report acquisition of beneficial ownership of 5% or more of a class of equity securities
Published on May 1, 1998
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
VAALCO ENERGY, INC.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
91851C201
(CUSIP Number)
LAWRENCE C. TUCKER
Brown Brothers Harriman & Co.
59 Wall Street
New York, New York
(212) 483-1818
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
April 21, 1998
(Date of Event which Requires Filing of
this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
2
CUSIP No. 91851C201
1 NAME OF REPORTING PERSON
THE 1818 FUND II, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OR ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF -0-
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 31,263,441
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH -0-
REPORTING 10 SHARED DISPOSITIVE POWER
PERSON WITH 31,263,441
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
31,263,441
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
70.27%
14 TYPE OF REPORTING PERSON
PN
3
CUSIP No. 91851C201
1 NAME OF REPORTING PERSON
BROWN BROTHERS HARRIMAN & CO.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OR ORGANIZATION
NEW YORK
7 SOLE VOTING POWER
NUMBER OF -0-
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 31,263,441
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH -0-
REPORTING 10 SHARED DISPOSITIVE POWER
PERSON WITH 31,263,441
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
31,263,441
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
70.27%
14 TYPE OF REPORTING PERSON
PN
4
CUSIP No. 91851C201
1 NAME OF REPORTING PERSON
T. MICHAEL LONG
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OR ORGANIZATION
UNITED STATES
7 SOLE VOTING POWER
NUMBER OF -0-
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 31,263,441
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH -0-
REPORTING 10 SHARED DISPOSITIVE POWER
PERSON WITH 31,263,441
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
31,263,441
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
70.27%
14 TYPE OF REPORTING PERSON
IN
5
CUSIP No. 91851C201
1 NAME OF REPORTING PERSON
LAWRENCE C. TUCKER
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OR ORGANIZATION
UNITED STATES
7 SOLE VOTING POWER
NUMBER OF -0-
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 31,263,441
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH -0-
REPORTING 10 SHARED DISPOSITIVE POWER
PERSON WITH 31,263,441
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
31,263,441
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
70.27%
14 TYPE OF REPORTING PERSON
IN
6
Item 1. Security and Issuer.
This Statement on Schedule 13D relates to the common stock, par value
$.10 per share (the "Common Stock"), of Vaalco Energy, Inc., a Delaware
corporation (the "Company"), whose principal executive office is located at 4600
Post Oak Place, Suite 309, Houston, Texas 77027.
Item 2. Identity and Background.
(a), (b), (c) and (f). This Statement on Schedule 13D is being filed by
The 1818 Fund II, L.P., a Delaware limited partnership (the "Fund"), Brown
Brothers Harriman & Co., a New York limited partnership and general partner of
the Fund ("BBH&Co."), T. Michael Long ("Long") and Lawrence C. Tucker ("Tucker")
(the Fund, BBH&Co., Long and Tucker are referred to collectively herein as the
"Reporting Persons"). The Fund was formed to provide a vehicle for institutional
and substantial corporate investors to acquire significant equity interests in
medium-sized publicly owned United States corporations. BBH&Co. is a private
bank. Pursuant to a resolution adopted by the partners of BBH&Co., BBH&Co. has
designated and appointed Long and Tucker, or either of them, the sole and
exclusive partners of BBH&Co. having voting power (including the power to vote
or to direct the voting) and investment power (including the power to dispose or
to direct the disposition) with respect to the Common Stock.
7
The address of the principal business and principal offices of the Fund
and BBH&Co. is 59 Wall Street, New York, New York 10005.
The business address of each of Long and Tucker is 59 Wall Street, New
York, New York 10005. The present principal occupation or employment of each of
Long and Tucker is as a general partner of BBH&Co. Long and Tucker are citizens
of the United States.
The name, business address, present principal occupation or employment
(and the name, principal business and address of any corporation or other
organization in which such employment is conducted) and the citizenship of each
general partner of BBH&Co. is set forth on Schedule I hereto and is incorporated
herein by reference.
(d) and (e). During the last five years, neither any Reporting Person
nor, to the best knowledge of each Reporting Person, any person identified on
Schedule I has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or was a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
which any such person was or is subject to a judgement, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
8
Item 3. Source and Amount of Funds or Other Consideration.
Pursuant to a Stock Acquisition Agreement and Plan of Reorganization,
dated as of February 17, 1998 and amended as of April 21, 1998 (the "Stock
Acquisition Agreement"), among the Company, the Fund and 1818 Oil Corp., a
Delaware corporation and wholly-owned subsidiary of the Fund ("1818 Oil"), upon
the closing of the transactions contemplated by the Stock Acquisition Agreement
(the "Acquisition Closing"), the Company issued, and the Fund acquired from the
Company, (i) 10,000 shares of preferred stock, par value $25.00 per share (the
"Preferred Stock"), of the Company and (ii) 3,763,441 shares of Common Stock. A
copy of the Stock Acquisition Agreement and Amendment No. 1 thereto are attached
hereto as Exhibits 1 and 2 respectively and are hereby incorporated by
reference. The Fund has also entered into a Registration Rights Agreement, dated
as of April 21, 1998 (the "Registration Rights Agreement"), between the Company
and the Fund, pursuant to which the Company has agreed, under the terms and
conditions set forth therein, to register under the Securities Act of 1933, as
amended, the Common Stock issuable upon the conversion of the shares of
Preferred Stock held by the Fund and all other shares of Common Stock held by
the Fund. A copy of the Registration Rights Agreement is attached hereto as
Exhibit 3 and is hereby incorporated by reference.
The consideration paid by the Fund for the shares of Preferred Stock it
purchased under the Stock Acquisition Agreement consisted of all of the issued
and outstanding shares of common stock, par value $.01 per share (the "1818 Oil
9
Common Stock"), of 1818 Oil and the consideration for the shares of Common Stock
it purchased under the Stock Acquisition Agreement consisted of $7,000,000 in
cash.1/
The cash portion of the consideration (as well as the consideration the
Fund originally paid for the shares of 1818 Oil Common Stock) was obtained by
the Fund from capital contributions made by its partners pursuant to
pre-existing capital commitments.
Item 4. Purpose of Transaction.
The Fund has acquired the securities of the Company for investment
purposes only.
As described below, in connection with the closing under the Stock
Acquisition Agreement, the Fund acquired certain rights and privileges with
respect to the Board of Directors and management of the Company which may impede
the acquisition of control of the Company by any person. Pursuant to the terms
of the Preferred Stock, all of the outstanding shares of which are held by the
Fund, for so long as the number of outstanding shares of Preferred Stock
represent (after giving effect to any adjustments) on a fully-diluted basis at
least five percent (5%) of the
10
total number of shares of Common Stock outstanding, the holders of the Preferred
Stock have the right to elect three members of the Board of Directors of the
Company. As of the Acquisition Closing, the number of members of the Board of
Directors was increased from five to eight to allow the Fund, as holder of all
of the outstanding shares of Preferred Stock, to designate three individuals to
be directors of the Company, and such individuals have been elected to the Board
of Directors. In addition, the holders of shares of Preferred Stock vote
together with the holders of shares of Common Stock on all matters submitted to
the holders of Common Stock at any annual or special meeting of the Company (or
any written consent in lieu thereof), including the election of directors.
Accordingly, as described in Item 5 below, as of the date hereof the combined
voting power of the shares of Common Stock and the shares of Preferred Stock
held by the Fund would allow the Fund to control any vote submitted to the
shareholders of the Company (or any written consent in lieu thereof) which
requires the consent of a majority of holders of shares of Common Stock. A copy
of the Certificate of Designation of the Preferred Stock is attached hereto as
Exhibit 4 and is hereby incorporated by reference.
Pursuant to the terms of the Stock Acquisition Agreement, the By-Laws
of the Company were amended as of the Acquisition Closing to provide that the
consent of at least one director elected by the class vote of the holders of
shares of Preferred Stock is required for the Board of Directors to approve
certain actions by the Company, including, without limitation, (i) the issuance
of any equity securities of the Company or any subsidiary thereof, or rights of
any kind convertible or exchangeable for any equity securities of the Company or
any subsidiary thereof, or
11
any option, warrant or other subscription or purchase right with respect to
equity securities of the Company or any subsidiary thereof; (ii) any transaction
of merger or consolidation of the Company or any subsidiary thereof with one or
more persons or any transaction of merger or consolidation of one or more
persons into or with the Company or any subsidiary thereof; (iii) any sale,
conveyance, exchange or transfer to another person of (x) the voting stock of
the Company or any subsidiary thereof or (y) all or substantially all of the
assets of the Company or any subsidiary thereof, (iv) outside of the ordinary
course of business (x) any sale, conveyance, exchange, transfer or lease or
other disposition to another person of any material assets, rights or properties
of the Company or any subsidiary thereof or (y) any purchase, lease or other
acquisition of any material assets, rights or properties of another person; (v)
any amendment, modification or restatement of the Restated Certification of
Incorporation or By-Laws of the Company, or the certificate of incorporation of
any subsidiary of the Company (including, without limitation, a change in the
number of directors which constitutes the Board of Directors).
The Company has informed the Fund that, as a result of the closing
under the Stock Acquisition Agreement and a separate private placement of shares
of Common Stock, the Company currently does not have reserved and available for
issuance such number of authorized but unissued shares of Common Stock as would
12
be sufficient to permit the conversion of all of the outstanding shares of
Preferred Stock and all outstanding warrants and options with respect to the
Common Stock (collectively, the "Options") into shares of Common Stock. Pursuant
to a letter agreement, dated as of April 21, 1998 (the "Letter Agreement"),
among the Company, the Fund, Robert L. Gerry ("Gerry") and W. Russell Scheirman
("Scheirman"), the Fund, Gerry and Scheirman (i) waived any breach by the
Company of the terms of the Preferred Stock and Options held by each of them as
a result of there not being a sufficient amount of Common Stock available for
issuance upon the conversion or exercise of such securities; (ii) agreed not to
convert a certain number of shares of Preferred Stock and Options held by each
of them so that the Company would not be in breach of its obligations to other
persons with respect to the Company's having a sufficient amount of authorized
but unissued shares of Common Stock to allow for the conversion into Common
Stock of all of the Options held by such other persons; and (iii) agreed to vote
in favor of an amendment to the Restated Certificate of Incorporation of the
Company to allow the Company to have reserved and available for issuance such
number of shares of Common Stock as would be sufficient to allow for the
conversion of all outstanding shares of Preferred Stock and all outstanding
Options. A copy of the Letter Agreement is attached hereto as Exhibit 5 and is
hereby incorporated by reference.
The Reporting Persons may from time to time acquire additional shares
of Common Stock in the open market or in privately negotiated transactions,
subject to the availability of shares of Common Stock at prices deemed
favorable, the Company's business or financial condition and to other factors
and conditions the
13
Reporting Persons deem appropriate. Alternatively, the Reporting Persons may
sell all or a portion of the shares of Common Stock or Preferred Stock in open
market or in privately negotiated transactions, subject to the factors and
conditions referred to above and compliance with applicable laws.
Except as described in the Registration Rights Agreement and the Letter
Agreement and as set forth above in this Item 4, no Reporting Person has any
present plans or proposals which relate to or would result in: (a) the
acquisition by any person of additional securities of the issuer, or the
disposition of securities of the issuer; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Company or any of its subsidiaries; (c) a sale or transfer of a material amount
of assets of the Company or of any of its subsidiaries; (d) any change in the
present board of directors or management of the Company, including any plans or
proposals to change the number or term of directors or to fill any existing
vacancies on the board; (e) any material change in the present capitalization or
dividend policy of the Company; (f) any other material change in the Company's
business or corporate structure; (g) changes in the Company's charter, bylaws or
instruments corresponding thereto or other actions which may impede the
acquisition of control of the Company by any person; (h) causing a class of
securities of the Company to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association; (i) a class of equity securities of
the Company becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Securities Exchange Act of 1934; or (j) any action
similar to any of those enumerated above.
14
Item 5. Interest in Securities of the Issuer.
(a) through (c). As set forth above, in connection with the closing
under the Stock Acquisition Agreement the Fund acquired 10,000 shares of
Preferred Stock and 3,763,441 shares of Common Stock. Accordingly, as of April
27, 1998, assuming the conversion of the shares of Preferred Stock held by the
Fund into shares of Common Stock as of such date, the Fund may be deemed to own
31,263,441 shares of Common Stock, which, based on calculations made in
accordance with Rule 13-d3(d) promulgated under the Securities Exchange Act of
1934, as amended, and there being 16,986,527 shares of Common Stock outstanding
on April 27, 1998 (as represented to the Fund by the Company), represents 70.27%
of the outstanding shares of Common Stock.
By virtue of BBH&Co.'s relationship with the Fund, BBH&Co. may be
deemed to beneficially own 31,263,441 shares of Common Stock, representing
approximately 70.27% of the outstanding shares of Common Stock (based on the
number of shares of Common Stock outstanding on April 27, 1998 as represented by
the Company to the Fund). By virtue of the resolution adopted by BBH&Co.
designating Long and Tucker, or either of them, as the sole and exclusive
partners of BBH&Co. having voting power (including the power to vote or to
direct the voting) and investment power (including the power to dispose or to
direct the disposition) with respect to the securities of the Company, each of
Long and Tucker may be deemed to beneficially own 33,263,441 shares of Common
Stock, representing approximately 70.27% of the outstanding shares of Common
Stock (based on the
15
number of shares of Common Stock outstanding on April 27, 1998 as represented by
the Company to the Fund).
Except as set forth above, no Reporting Person nor, to the best
knowledge of each Reporting Person, any person identified on Schedule I,
beneficially owns any shares of Common Stock or has effected any transaction in
shares of Common Stock during the proceeding 60 days.
Paragraphs (d) and (e) of Item 5 of Schedule 13D are not applicable to
this filing.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to the Common Stock of the Issuer.
The Company and the Fund are parties to the Registration Rights
Agreement which gives the Fund, among other things, the right, on the terms and
conditions set forth therein, to require the Company to register for sale to the
public the shares of Common Stock issued upon the conversion of the Preferred
Stock and any shares of Common stock held by the Fund.
Except as described elsewhere in this Statement and as set forth in the
Stock Acquisition Agreement, the Registration Rights Agreement and the Letter
Agreement, copies of which are attached hereto as Exhibits 1 (and 2), 3, and 5
respectively, and incorporated herein by reference, to the best knowledge of the
Reporting Persons, there exist no contracts, arrangements, understandings or
relationships (legal or otherwise) among the persons named in Item 2 and between
16
such persons and any person with respect to any securities of the Company,
including but not limited to transfer or voting of any securities of the
Company, finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies.
Item 7. Material To Be Filed as Exhibits.
1. Stock Acquisition Agreement and Plan of Reorganization, dated as of
February 27, 1998, among the Company, the Fund and 1818 Oil.
2. Amendment No. 1 to the Stock Acquisition Agreement and Plan of
Reorganization, dated as of April 21, 1998, among the Company, the Fund and 1818
Oil.
3. Registration Rights Agreement, dated as of April 21, 1998, between
the Company and the Fund.
4. Certificate of Designation of the Preferred Stock.
5. Letter Agreement, dated April 21, 1998, among the Company, the Fund,
Gerry and Scheirman.
17
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: April 30, 1998
THE 1818 FUND II, L.P.
By: Brown Brothers Harriman & Co.,
General Partner
By: /S/ Lawrence C. Tucker
----------------------
Name: Lawrence C. Tucker
Title: Partner
BROWN BROTHERS HARRIMAN & CO.
By: /s/ Lawrence C. Tucker
----------------------
Name: Lawrence C. Tucker
Title: Partner
/s/ T. Michael Long
-------------------
T. Michael Long
/s/ Lawrence C. Tucker
----------------------
Lawrence C. Tucker
18
SCHEDULE I
Set forth below are the names and positions of all of the general
partners of BBH & Co. The principal occupation or employment of each person
listed below is private banker, and, unless otherwise indicated, the business
address of each person is 59 Wall Street, New York, New York 10005. Unless
otherwise indicated, each person listed below is a citizen of the United States.
Business Address
(if other than as
Name indicated above)
- ---- ----------------
Peter B. Bartlett
Brian A. Berris
Walter H. Brown
Douglas A. Donahue, Jr. 40 Water Street
Boston, Massachusetts 02109
Anthony T. Enders
Alexander T. Ercklentz
Terrence M. Farley
Elbridge T. Gerry, Jr.
Robert R. Gould
Kyosuko Kashimoto 8-14 Nihonbashi 30-Chome Chuo-ku
(citizen of Japan) Tokyo 103, Japan
Radford W. Klotz
Noah T. Herndon 40 Water Street
Boston, Massachusetts 02109
Landon Hilliard
19
Business Address
(if other than as
Name indicated above)
- ---- ----------------
Michael Kraynak, Jr.
T. Michael Long
Hampton S. Lynch
Michael W. McConnell
William H. Moore III
Donald B. Murphy
John A. Nielsen
Eugene C. Rainis
A. Heaton Robertson 40 Water Street
Boston, Massachusetts 02109
Jeffrey A. Schoenfeld 40 Water Street
Boston, Massachusetts 02109
Stokley P. Towles 40 Water Street
Boston, Massachusetts 02109
Lawrence C. Tucker
Maarten van Hengel
Douglas C. Walker 1531 Walnut Street
Philadelphia, Pennsylvania 19102
Laurence F. Whittemore
Richard H. Witmer, Jr.
20
INDEX TO EXHIBITS
Page
Exhibit Description Number
------- ----------- ------
1 Stock Acquisition Agreement and Plan
of Reorganization, dated as of
February 27, 1998, among the
Company, the Fund and 1818 Oil
2 Amendment No. 1 to the Stock
Acquisition Agreement and Plan of
Reorganization, dated as of April 21,
1998, among the Company, the Fund
and 1818 Oil
3 Registration Rights Agreement, dated
as of April 21, 1998, between the
Company and the Fund
4 Certificate of Designation of the
Preferred Stock
5 Letter Agreement, dated April 21,
1998, among the Company, the Fund,
Gerry and Scheirman