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Confidential, For Use of the Commission Only
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[X] Revised Preliminary Proxy Statement
[X] Confidential, for use of the Commission only (as permitted by Rule
(14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
SEAL FLEET, INC.
(Name of Registrant as Specified In Its Charter)
John W. Menke
Butler & Binion, L.L.P
1000 Louisiana, Suite 1700
Houston, Texas 77002
(713) 237-3690
(Name of Person Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
<TABLE>
<S> <C>
1) Title of each class of securities to which transaction applies: ____________________________________
2) Aggregate number of securities to which transaction applies: _______________________________________
3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11:
____________________________________________________________________________________________________
4) Proposed maximum aggregate value of transaction: $6,300,000
5) Total fee paid:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:_____________________________________________________________________________
2) Form, Schedule or Registration Statement No.:_______________________________________________________
3) Filing Party:_______________________________________________________________________________________
4) Date Filed:_________________________________________________________________________________________
====================================================================================================================================
</TABLE>
<PAGE>
[SEAL FLEET LETTERHEAD]
Dear Seal Fleet Stockholder:
You are cordially invited to attend the Annual Meeting of the stockholders of
Seal Fleet, Inc. (``Seal Fleet'') to be held at 10:00 a.m. on July __, 1996, at
the offices of Seal Fleet, 3305 Avenue S, Galveston, Texas 77550. At the annual
meeting, you will be asked to consider and approve (a) a proposal to sell Seal
Fleet's assets, pay off all debt to National Western Life Insurance Company and
pay off and/or rearrange Seal Fleet's debt to the Three R Trusts, and change the
nature of Seal Fleet's business (collectively, the ``Sale''), (b) the election
of directors and (c) ratification of the appointment of Seal Fleet's auditors.
The Board of Directors of Seal Fleet has unanimously approved and recommends
that the stockholders of Seal Fleet vote FOR the Sale. Enclosed with this
letter are a Notice of Annual Meeting of Stockholders and a Proxy Statement of
Seal Fleet which describes in detail the proposed Sale, its background and other
related information.
(1) Please consider carefully all the materials in the Proxy Statement.
(2) Please execute and return the enclosed proxy card as soon as possible.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. If you
attend the annual meeting, you may vote in person if you wish, even though you
have previously returned your proxy.
Please call Trina Salinas at (409) 763-8878 for information or assistance.
Sincerely,
John W. Bissell
Chairman of the Board
Galveston, Texas
June __, 1996
<PAGE>
SEAL FLEET, INC.
3305 Avenue S
Galveston, Texas 77550
(409) 763-8878
________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY __, 1996
The Annual Meeting of Stockholders of Seal Fleet, Inc. (the ``Company'') will
be held in the offices of the Company at 3305 Avenue S, Galveston, Texas 77550,
on July __, 1996, at 10:00 A.M., Galveston time, for the following purposes:
1. To consider and vote on a proposal to sell the Company's assets, pay off
or rearrange the Company's debt and change the nature of the Company's
business, all as described in the attached Proxy Statement.
2. To elect a Board of Directors to serve until the next annual meeting of
stockholders and until their respective successors are elected. If the
sale described in item number 1. above is approved and consummated, such
directors will only serve until the closing of such sale.
3. To ratify the appointment of Pannell Kerr Forster of Texas, P.C. as
independent auditors for the Company for the 1996 fiscal year.
4. To act upon any other matters properly coming before the meeting or any
adjournment thereof.
Holders of common stock of the Company at the close of business on June __,
1996, will be entitled to vote at the meeting and any adjournment thereof, as
set forth in the accompanying Proxy Statement.
By order of the Board of Directors
June __, 1996 Ann McLeod Moody
Galveston, Texas Secretary
IN ORDER TO AVOID ADDITIONAL SOLICITATION EXPENSE TO THE COMPANY, PLEASE SIGN,
DATE AND MAIL YOUR PROXY PROMPTLY IN THE RETURN ENVELOPE PROVIDED, EVEN IF YOU
PLAN TO ATTEND THE MEETING. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO ITS
USE AT THE ANNUAL MEETING BY GIVING WRITTEN NOTICE OF REVOCATION, BY SIGNING AND
DELIVERING TO THE SECRETARY OF THE COMPANY A PROXY BEARING A LATER DATE OR BY
PERSONALLY VOTING AT THE MEETING.
<PAGE>
SEAL FLEET, INC.
PROXY STATEMENT
This Proxy Statement is being furnished to the holders (``Class A
Stockholders'') of Class A Voting Common Stock, $.10 par value (``Class A
Stock''), and to the holders (``Class B Stockholders'') of Class B Voting Common
Stock, $.10 par value (``Class B Stock''), of Seal Fleet, Inc., a Nevada
corporation (the ``Company'' or ``Seal Fleet''), in connection with the
solicitation of proxies by its Board of Directors for use at an Annual Meeting
of Stockholders of the Company (the ``Annual Meeting'') scheduled to be held on
July __, 1996, at 10:00 a.m., Galveston, Texas time, at the principal executive
offices of the Company, 3305 Avenue S, Galveston, Texas 77550, and at any
adjournment or postponement thereof. At the Annual Meeting, the Class A
Stockholders and the Class B Stockholders (collectively, the ``Stockholders'')
will be asked to consider and vote upon a proposal to sell substantially all of
the assets of the Company (the ``Sale'') to Hvide Marine Incorporated, a Florida
corporation (``Hvide''), pursuant to the Asset Purchase Agreement (the
``Agreement''), dated as of March 29, 1996, by and among the Company, its
subsidiaries Sealcraft Operators, Inc., Seal GP, Inc. and South Corporation, and
Hvide and Thomas M. Ferguson (``Ferguson'') and to pay off or rearrange the
Company's debt and change the nature of the Company's business. In addition,
the Stockholders will elect directors and will be asked to consider and vote
upon a proposal to ratify the appointment of Pannell Kerr Forster of Texas, P.C.
as independent auditors of the Company for the 1996 fiscal year.
FOR A DESCRIPTION OF CERTAIN CONSIDERATIONS THAT SHOULD BE CONSIDERED BY
STOCKHOLDERS IN CONNECTION WITH THE SALE AND SUBSEQUENT CHANGE IN THE NATURE OF
THE COMPANY'S BUSINESS, SEE ``THE SALE OF ASSETS - RISK FACTORS''. UNDER NEVADA
LAW, HOLDERS OF CLASS A STOCK AND CLASS B STOCK (COLLECTIVELY, THE ``COMMON
STOCK'') WILL NOT HAVE DISSENTERS' RIGHTS OF APPRAISAL IN CONNECTION WITH THE
SALE. SEE ``THE SALE OF ASSETS -DISSENTERS' RIGHTS''.
A proxy in the form accompanying this Proxy Statement (each a ``Proxy''),
when properly executed and returned, will be voted in accordance with the
directions specified on the Proxy, and otherwise in accordance with the judgment
of the persons designated therein as Proxies. Any Proxy which does not withhold
authority to vote or on which no other instructions are given will be voted FOR
the Sale (including the related payment and/or rearrangement of debt and change
in the business of the Company), FOR the election of the nominees named herein
to the Board of Directors and FOR the ratification of appointment of independent
auditors. Any Proxy may be revoked at any time before it is exercised by
delivering, to the Secretary of the Company, written notice of revocation or by
duly executing a Proxy bearing a later date, or by voting in person at the
Annual Meeting.
This Proxy Statement and the accompanying Notice and form of Proxy are being
mailed to Stockholders on or about June __, 1996. The annual report to
Stockholders for the Company's fiscal year ended December 31, 1995 (the ``Annual
Report'') is also being mailed to Stockholders contemporaneously with this Proxy
Statement. Portions of the Annual Report are incorporated herein by reference.
At the date of this Proxy Statement, the Board of Directors of the Company
does not know of any business to be presented at the Annual Meeting other than
those matters which are set forth in the Notice. If any other business should
properly come before the Annual Meeting, it is intended that the shares of Class
A Stock represented by any Proxy will be voted with respect to such business in
accordance with the judgment of the persons named in the Proxy.
The date of this Proxy Statement is June __, 1996
<PAGE>
SUMMARY
The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and Financial Statements and the
Notes thereto appearing elsewhere or incorporated by reference herein.
THE MEETING
The Annual Meeting will be held July __, 1996, for the purposes of (i) voting
to approve or disapprove the Sale, (ii) electing directors and (iii) ratifying
the appointment of the Company's independent auditors. Holders of Class A Stock
or Class B Stock at the close of business on June __, 1996, will be entitled to
vote at the Annual Meeting.
THE SALE
GENERAL. The Company has entered into the Agreement with Hvide to sell its
three marine vessels, two bareboat charters and related assets to Hvide for
$6,300,000 in cash. See ``The Sale of Assets - General''. Seal Fleet will
apply the proceeds of the Sale to the repayment of certain of the Company's
indebtedness and the reduction of its debt to the Trusts (as defined below).
The Trusts have agreed to forgive $500,000 of interest due to the Trusts and to
accept a new note for the remaining balance of the Company's debt to the Trust
in the amount of $3,000,000. Hvide will guaranty the payment of this note to
the Trusts.
In addition to the Company's own vessels and the vessels it bareboat
charters, the Company manages five vessels indirectly owned by the Trusts. The
Trusts also own 10.72% of the Company's outstanding shares of Class A Stock and
100% of the Company's Class B Stock. Hvide has agreed to acquire the Trusts'
vessels and its shares of Company stock.
As a result of the Sale, the Company will terminate its marine supply
business, with only its brokerage business and the travel agency remaining.
Ralph McIngvale, Vice President-Sales of the Company's subsidiary Sealcraft
Operators, Inc., is currently entitled to receive a salary plus 50% of the
receivables in excess of payables generated by the brokerage business. If the
Sale is consummated, the Company will transfer the brokerage business to Mr.
McIngvale, and he will assume responsibility for collecting the brokerage
business accounts receivable and paying the Company's payables and on-going
lease obligations relating to the brokerage business. Following the
consummation of the Sale, the Company and Mr. McIngvale will each receive 50% of
the receivables in excess of payables generated by the brokerage business prior
to the Sale. At March 31, 1996, such ongoing lease expenses were approximately
$1,900 per month and receivables in excess of payables were approximately
$248,000.
Seal Fleet has made no decision regarding whether to close, sell or continue
the travel agency business if the Sale is consummated.
REASONS FOR THE SALE. As of March 31, 1996, the Company was in default in
regards to $7,416,000 of debt payable to the Trusts. See ``The Sale of Assets -
The Company's Reasons for the Sale''. The Company has continued to operate
since its initial default on such debt in 1990 only at the forbearance of the
Trusts. If the Trusts were to enforce the Company's debt, the Company would be
liquidated with no return to the Stockholders. If the Company did not sell its
vessels following the anticipated sale of the Trusts' vessels to Hvide, the
Company would operate too small a fleet to generate sufficient revenues to
remain in business.
Prior to approving the Agreement, the Company solicited other offers for its
marine assets. The Company's Board of Directors also received a fairness
opinion from Rauscher Pierce Refsnes, Inc. to the
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<PAGE>
effect that the Sale was fair, from a financial point of view, to the public
holders of the Company's Class A Stock. In addition, the Company received two
appraisals of its three marine vessels, which appraised the aggregate value of
the vessels at $7,560,000 and $6,350,000, respectively. Although the Company
has not assigned a value to Hvide's guaranty of the Company's note to the
Trusts, the Board of Directors believes that the guaranty has significant value.
In addition, the Board of Directors considered the $500,000 reduction in debt to
the Trusts as part of the consideration to be received for the Sale.
Notwithstanding the appraised value of its vessels, the Company believes that
its agreement with Hvide is the only outstanding offer to the Company that will
allow the Company to cure its defaults in its obligations to the Trusts and
remain in existence.
BUSINESS FOLLOWING THE SALE. As a result of the Sale, substantially all of
the Company's assets will be sold, its debts will be rearranged and reduced and
the Company will become an acquisition company with a new Board of Directors and
new executive officers. Seal Fleet will be transformed to serve as a vehicle to
effect acquisitions, whether by merger, exchange of capital stock, acquisition
of assets or other similar business combination (a ``Business Combination''),
with an operating business (an ``Acquired Business''). The business objective
of the transformed company (hereinafter, ``Post-Sale Seal'') will be to effect a
Business Combination with an Acquired Business which Post-Sale Seal believes has
significant growth potential. Post-Sale Seal intends to utilize cash, equity,
debt or a combination thereof in effecting a Business Combination. See ``The
Sale of Assets - Business of Seal Fleet Following the Sale''.
The Stockholders of the Company will not have an opportunity to vote
separately on the sale of assets and the change in the nature of the Company's
business. A vote for the Sale is also a vote for a change in the Company's
business. Following the consummation of the Sale, Hvide and Magnum (as defined
below) will own 10.72% of the Class A Stock (21.7% if Magnum consummates its
planned purchase of 277,778 shares following the consummation of the Sale) and
100% of the Class B Stock and will consequently have the ability to appoint a
majority of the Company's Board of Directors to effect the business plan
described herein. Following the consummation of the Sale, Ferguson will serve
as President and Chief Executive Officer of Seal Fleet and also will be a
director.
Had the sale been consummated on March 31, 1996, following the consummation
of the Sale the Company would have had total assets of $3,880,000 and total
liabilities of $4,510,000. Following such closing, the Company will have only
its travel agency business to generate income. The Company does not anticipate
that the travel agency business will be able to generate sufficient income to
meet the Company's debt service and, in any event, the travel agency business
may be sold or otherwise discontinued. The Company's ongoing ability to meet
its debt service obligations will be dependent on its ability to successfully
complete a business combination with an entity with sufficient cash flow to meet
the Company's obligations. See ``The Sale of Assets - Risk Factors'' for a
description of certain business risks inherent in changing the Company into an
acquisition Company. If the Company defaults on its obligation to the Trusts,
the Trusts will have recourse against Hvide under its guaranty. However, if
Hvide makes any payments to the Trusts pursuant to its guaranty, the Company
would be required to reimburse Hvide for such payments.
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<PAGE>
THE ANNUAL MEETING
The accompanying Proxy is being solicited by Seal Fleet, for use in
connection with the Annual Meeting, and at any adjournments or postponements
thereof.
PURPOSE OF ANNUAL MEETING
THE SALE. At the Annual Meeting, holders of the Company's Common Stock will
be asked to consider and vote on a proposal to approve the Sale and the
resulting payment and/or rearrangement of debt and change in the Company's
business. The Company has entered into the Agreement providing for the sale of
the Company's vessels and related assets to Hvide. Pursuant to the Agreement,
as of the Effective Time (as defined below), the Company will sell substantially
all of its operating assets to Hvide. The consummation of the Sale is subject
to a number of conditions, including approval of the Sale by the Stockholders,
Hvide's obtaining financing, and simultaneous consummation of a sale by four
trusts established by Robert L. Moody for the benefit of his children
(collectively, the ``Trusts'') of the five marine vessels owned beneficially by
the Trusts and the shares of Seal Fleet Common Stock owned by the Trusts. If
the Sale is approved and consummated, the Company's debt will be substantially
reduced and the nature of the Company's business will be changed as described
herein. See ``The Sale of Assets''.
ELECTION OF DIRECTORS. The Stockholders will also vote on the election of
persons to serve as directors. The Company's Board of Directors consists of
seven members. The persons elected will serve until the next annual meeting of
Stockholders and election of their successors unless the Sale is approved and
consummated, in which case the elected directors will be replaced. See
``Election of Directors''.
RATIFICATION OF APPOINTMENT OF AUDITORS. The Stockholders will also vote to
approve or disapprove the appointment of Pannell Kerr Forster of Texas, P.C. as
independent auditors for the Company for the 1996 fiscal year. See
``Ratification of Appointment of Auditors''.
At the date of this Proxy Statement, the Board of Directors of the Company
does not know of any business to be presented at the Annual Meeting other than
those matters which are set forth in the Notice. If any other business should
properly come before the Annual Meeting, it is intended that the shares of Class
A Stock represented by any Proxy will be voted with respect to such business in
accordance with the judgment of the persons named in the Proxy.
RECORD DATE; QUORUM
The close of business on June __, 1996 (``Record Date'') has been fixed as
the record date for determining the holders of the Company's Common Stock
entitled to vote at the Annual Meeting. The presence, in person or by Proxy, of
the holders of a majority of the outstanding shares of Common Stock entitled to
vote at the Annual Meeting is necessary to constitute a quorum for the
transaction of business at the Annual Meeting. Seal Fleet has two classes of
stock outstanding, Class A Voting Common Stock, par value $0.10 per share
(``Class A Stock''), and Class B Voting Common Stock, par value $0.10 per share
(``Class B Stock''). The holders of the Class B Stock are entitled to elect a
majority of the Company's directors, and the holders of Class A Stock are
entitled to elect the remaining directors. In addition, the holders of each of
the two classes of stock are entitled to vote as a separate class on certain
other matters. See ``The Sale of Assets''. On the Record Date, there were
outstanding 1,984,627 shares of Class A Stock and 50,000 shares of Class B
Stock. Each Stockholder will be entitled to one vote for each share of stock
owned.
REQUIRED VOTE
Under Nevada law and the Articles of Incorporation of the Company, approval
of the Sale requires the affirmative vote of the holders of: (i) a majority of
the outstanding shares of Class A Stock; and (ii) a majority
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of the outstanding shares of Class B Stock, each voting separately as a class.
The Agreement further conditions the Sale on the affirmative vote of holders of
a majority of the shares of Class A Stock, other than shares held by the Trusts.
However, this condition to the Sale could be waived by the Company. Each of
these voting requirements is independent of the others, and the Sale will not be
approved unless all of these conditions have been satisfied or, if permitted by
law, waived. Each share of Common Stock is entitled to one vote on the proposal
to approve the Sale. Under Nevada law, abstentions and shares of Common Stock
with respect to which voting power has been withheld, such as broker non-votes,
will be equivalent to a ``no'' vote for purposes of approving the Sale. As of
the record date, the Trusts own 212,655 shares (10.72%) of the Class A Stock and
50,000 shares (100%) of the Class B Stock. The Trusts have indicated they will
vote the shares of Class A Stock and Class B Stock owned by them for approval of
the Sale.
The persons nominated as ``Class A Directors'' will be elected if they
receive the affirmative vote of a plurality of the outstanding shares of Class A
Stock present, in person or by Proxy, at the Annual Meeting and entitled to
vote. Cumulative voting is not permitted. The persons nominated as ``Class B
Directors'' likewise will be elected if they receive the affirmative vote of a
plurality of the outstanding shares of Class B Stock present, in person or by
Proxy, at the Annual Meeting and entitled to vote. Holders of Class A Stock may
only vote for Class A Directors, and holders of Class B Stock may only vote for
Class B Directors. ``Plurality'' means that individuals who receive the largest
number of votes cast are elected as directors up to the maximum number of
directors to be chosen at the Annual Meeting. Ratification of the independent
auditors and any other matters to come before the Annual Meeting will require
the approval of a majority of the shares of Common Stock present, in person or
by Proxy, at the Annual Meeting and entitled to vote. Therefore, abstentions
will have the same effect as a vote against the proposal.
Votes at the Annual Meeting will be tabulated by an Inspector of Election
appointed by the Company.
PROXIES
Solicitation of Proxies will be primarily by mail, but Proxies may also be
solicited personally, by telephone or fax by officers, directors and regular
employees of the Company. The Company will make arrangements with brokerage
firms, banks and other nominees to forward proxy materials to beneficial owners
of shares and will reimburse such nominees for their reasonable costs.
Corporate Investor Communications, Inc. has been retained as Information Agent
to aid in the solicitation of Proxies. It is estimated that the fee for such
firm will not exceed $3,500, plus out-of-pocket costs and expenses. The cost of
the solicitation will be borne by the Company. Corporate Investor
Communications, Inc. will furnish copies of this Proxy Statement and related
materials to the Stockholders. If you have any questions regarding this
solicitation or requests for assistance, please contact Corporate Investor
Communications, Inc. at the following telephone number or address:
(800) 242-4410
111 Commerce Road
Carlstadt, New Jersey 07072-2856
All properly signed and submitted Proxies will be voted. Where a choice has
been specified by the Stockholder as provided on the Proxy, the Proxy will be
voted (or withheld) in accordance with such specification. If a Proxy does not
specify otherwise, it will be voted FOR the Sale (including the related payment
and/or rearrangement of debt and change in the business of the Company), FOR the
election of management's slate of directors and FOR the ratification of the
appointment of the independent auditors. Any Stockholder giving a Proxy may
revoke it at any time prior to its use at the meeting by giving the Company
written notice of the revocation, by signing and delivering to the Secretary of
the Company a Proxy bearing a later date, or by personally voting at the
meeting.
5
<PAGE>
PROPOSAL I
THE SALE OF ASSETS
PARTIES TO THE AGREEMENT
Seal Fleet, Inc. The Company is engaged in one major and two related
businesses. The Company's primary business is the operation of a fleet of
offshore service vessels. The Company owns three vessels and manages an
additional seven vessels, five of which are owned by affiliates of the Trusts,
stockholders of the Company, and two of which are bareboat chartered from their
respective owners. See ``Interests of Certain Persons in the Sale'' and
``Election of Directors - Certain Transactions''. One of the chartered vessels
is owned by an entity owned by employees of the Company and an unaffiliated
third party. See ``Election of Directors - Certain Transactions''. In
addition, the Company operates a ship brokerage business and a travel agency.
For a description of the Company's business and properties, refer to the
description of the Company's business and properties included in pages 4 through
7 of the Company's Annual Report, which are incorporated herein by reference.
HVIDE MARINE INCORPORATED. Hvide is also engaged in the marine business.
Hvide currently operates a total of 91 vessels providing offshore energy support
services, offshore and harbor towing, and chemical and petroleum product
transportation. See ``Business of Seal Fleet Following the Sale - Business Plan
for Post-Sale Seal Fleet - Shareholders''.
THOMAS M. FERGUSON. Ferguson is Chairman of the Board and President of First
Stanford Corporation, a private advisory company. Ferguson also owns, and is
the sole officer and director of, First Magnum Corporation (``Magnum'').
Ferguson has assigned to Magnum his rights to acquire Seal Fleet Common Stock
from Hvide. Ferguson has informed the Company that, following the consummation
of the Sale, he will be appointed as President and Chief Executive Officer of
the Company and as a Class B Director of the Company. See ``Business of Seal
Fleet Following the Sale''.
All information contained in this Proxy Statement relating to Hvide,
Ferguson, Magnum and the business of the Company following the Sale has been
supplied by Hvide and Ferguson.
GENERAL
Seal Fleet proposes to sell its three vessels, two bareboat charters,
customer agreements for use of vessels and inventory related to the Company's
vessels to Hvide for $6,300,000. In addition, Hvide will guaranty the Company's
$3,000,000 indebtedness to the Trusts remaining following the Sale. Hvide has
agreed to purchase such assets for cash. This Proxy Statement solicits the
approval of the Stockholders to the Sale, the application of the proceeds of the
Sale and the change in the Company's principal business.
Seal Fleet has entered into an agreement with Hvide pursuant to which Hvide
will purchase the Company's three vessels, the Company's bareboat charters of
the Sabine Seal (formerly named the State Flamingo) and Trinity Seal, inventory
related to such vessels and customer agreements for the use of such vessels
(collectively, the ``Assets''). Seal Fleet will apply the proceeds of the Sale
to the payment of all debt secured by the Company's vessels, payment of the
Company's bond due in August 1996, and the reduction of its debt to the Trusts.
See ``Interests of Certain Persons in the Sale''. The Trusts have agreed to
forgive $500,000 of interest due to the Trusts and accept a new note (the
``Post-Sale Note'') for the unpaid balance of the debt to Trusts in the amount
of $3,000,000. The Post-Sale Note will bear interest at 10% per annum, with
principal and interest payable monthly in arrears based upon a 60-month
amortization schedule for a 36-month period, with any remaining principal and
interest due and payable in full on the last day of the 37th month. Hvide will
guaranty payment of the Post-Sale Note.
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Seal Fleet manages five vessels owned by five limited partnerships (the
``Partnerships'') beneficially owned by the Trusts and is paid a management fee
equal to 6% of gross revenues on such vessels for the provision of such
services. The Trusts and the Partnerships have also agreed to sell the five
vessels owned by the Partnerships to Hvide. See ``Interests of Certain Persons
in the Sale''. In connection with its sale, Seal Fleet will make a final
accounting with the Partnerships for their vessels. Seal Fleet will pay to the
Partnerships, at the closing of the Sale, an amount equal to all billings to
customers for use of the Partnerships' vessels up to the closing of the Sale,
less all amounts previously paid to the Partnerships and less an amount equal to
expenses, including the Company's management fees, paid on behalf of the
Partnerships in connection with operation of the vessels. If such accounting
shows that the Partnerships owe the Company, such amount will be paid at
closing. Sixty days after the closing of the Sale, the Company and the
Partnerships will make a final accounting, adjusting for customer collections
after closing for services rendered before closing and all expenses incurred
before closing but paid after closing.
The Trusts have also agreed to sell all of their Common Stock of Seal Fleet
to Hvide. The Trusts own 212,655 shares (10.72%) of the Company's Class A Stock
and 50,000 shares (100%) of the Company's Class B Stock. Hvide has agreed to
sell 37,600 shares of the Class A Stock purchased from the Trusts and all of the
Class B Stock purchased from the Trusts to Ferguson. Ferguson has assigned his
rights to purchase such shares to Magnum.
As a result of the Sale, Seal Fleet will discontinue its marine supply vessel
business, with only the brokerage business and the travel agency remaining.
Ralph McIngvale, Vice President - Sales of the Company's subsidiary Sealcraft
Operators, Inc., will resign if the Sale is consummated, and Seal Fleet will
terminate its brokerage business. Mr. McIngvale has agreed to remain with Seal
Fleet until the Sale is consummated and, if the Sale is consummated and the
brokerage business is transferred to him, to collect the accounts receivable of
the brokerage business and to pay the accounts payable of the brokerage business
after the Sale. Mr. McIngvale is currently entitled to receive a salary plus
50% of the receivables in excess of payables generated by the brokerage
business. Pursuant to an agreement with Mr. McIngvale, if the brokerage
business is transferred to him, his salary will terminate and Seal Fleet will be
entitled to 50% of the excess of the receivables over the payables as of the
time of closing of the Sale, and Mr. McIngvale will retain the other 50%. Mr.
McIngvale will assume the Company's ongoing obligations under the leases for the
office space and equipment used by the brokerage business, and Seal Fleet will
not incur any expenses associated with the collection of the accounts, payment
of payables or final accounting for the business. At March 31, 1996, the
brokerage business's ongoing lease expenses were approximately $1,900 per month
and receivables in excess of payables were approximately $248,000. Mr.
McIngvale may continue the business thereafter for his own account. Seal Fleet
will continue to own the travel agency, but no decision has been made whether to
close, sell or continue the travel agency business if the Sale is consummated.
Consummation of the Sale will terminate the Company's marine supply vessel
business, which constitutes substantially all of the Company's operations.
After collection of the Company's accounts receivable and payment of its debt
and accounts payable, the Company will have no operating business (except for
the travel agency, which may or may not be continued). Magnum, the purchaser of
the Class B Stock and some of the Class A Stock, has indicated that its business
plan for the Company is to look for acquisition candidates for a new business
for the Company. See ``Business of Seal Fleet Following the Sale''.
THE COMPANY'S REASONS FOR THE SALE
In considering the Sale, the Board of Directors of the Company took into
account various advantages and disadvantages of the Sale to the Company and the
Stockholders. The advantages identified by the Board of Directors were:
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(a) The transaction will allow the Company to discontinue a business that
has not been sufficiently profitable to allow the Company to pay all of its
obligations as they became due without liquidating the Company;
(b) The structure of the transaction, in that approval of the Sale
requires the approval of holders of a majority of shares of Class A Stock
and, unless waived by the Company, approval of the holders of a majority of
the Class A Stock held by the public shareholders; and
(c) The Sale will allow the Company to reduce, restructure and cure
defaults in certain of the Company's debt obligations, some of which have
been in default for several years.
POSSIBLE DISADVANTAGES TO THE SALE
The Company's Board of Directors also identified the following possible
disadvantages of the Sale to the Company and the holders of Common Stock:
(a) The transaction will cause the Company to discontinue its marine
vessel business;
(b) The transaction will change the principal business of the Company,
its directors and officers; and
(c) The new business of the Company will be subject to substantial
business risks. See ``Business of Seal Fleet Following the Sale - Risk
Factors''.
RECOMMENDATION OF SEAL FLEET'S BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF SEAL FLEET HAS UNANIMOUSLY (OTHER THAN MR. RUSSELL
MOODY, WHO HAS NOT PARTICIPATED IN BOARD MEETINGS FOR THE PAST YEAR) APPROVED
THE SALE AND BELIEVES THAT THE SALE IS FAIR TO THE COMPANY'S STOCKHOLDERS. THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS APPROVE THE
SALE.
In reaching its decision to approve the Sale, the Board of Directors of Seal
Fleet considered numerous factors including, but not limited to: (i) the amount
and nature of the consideration to be received by the Company; (ii) the
structure of the Sale and the proposed business plan for the Company after the
Sale; (iii) the financial results of the Company for the last five years and the
prospects for the Company; (iv) the debt of the Company; (v) the historical
stock prices of Class A Stock; (vi) the absence of any better firm offer; (vii)
the opinion of the Company's independent investment banker that the Sale is fair
to the Stockholders from a financial point of view; (viii) surveys of the
Company's vessels conducted by independent appraisers; and (ix) the risks
associated with the industry generally.
In evaluating Hvide's offer, the Board of Directors of the Company considered
the following:
(a) Prospects for the Company. The Company was not profitable in 1995,
and there is no assurance that the Company will be sufficiently profitable in
the future to service all of the debt and accumulate equity for the
Stockholders, even though business has improved in 1996. The Board of
Directors determined that the Sale would substantially reduce the Company's
debt and increase its stockholders' equity, and that future operations, under
new management and in a new industry, might maximize a return for
Stockholders.
(b) The Company's debt. At March 31, 1996, the Company's total
liabilities exceeded $14 million and stockholders' equity was a deficit of
$3,520,000. $7,416,000 of the Company's debt is in default and therefore is
immediately due and payable. The Company's assets are insufficient to pay
all of its
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obligations, let alone make a distribution to Stockholders, if the Company
were liquidated. The Company's independent auditors have qualified their
opinions on the Company's financial statements since at least 1991 with
respect to the Company's viability as a going concern. The Sale provides a
means of paying a substantial portion of the debt, rearranging and extending
the balance of the debt owed to the Trusts and decreasing the deficit in
stockholders' equity. Magnum has offered to purchase 277,778 shares of the
Company's Class A Stock held in treasury for $100,000 following consummation
of the Sale as part of Magnum's plan to capitalize Seal Fleet following the
Sale. See ``Business of Seal Fleet Following the Sale - Business Plan for
Post-Sale Seal Fleet''.
(c) The sale of the Partnerships' five vessels by the Trusts. Hvide first
approached the Trusts for the purchase of their vessels. If the Trusts were
to sell their vessels alone, the Company would be left with a fleet composed
of its three vessels and any vessels that it could bareboat charter.
Termination of management of the Trusts' vessels would make continuation of
the Company's business impossible, unless the vessels could be replaced on
economic terms substantially the same to the Company as those with the
Trusts.
(d) The absence of any better firm offer for the Assets. In this regard,
the Company has discussed the sale of its vessels with other marine business
companies and tried to solicit other potential buyers with respect to
acquiring the Assets. In the weeks prior to approval of the Agreement by the
Board, management contacted by telephone certain companies in similar
businesses to inform them about the pending sale and to solicit their
interest in buying the Company's vessels. In addition, representatives of
Rauscher Pierce Refsnes, Inc., in conducting their due diligence in
connection with rendering their fairness opinion, also solicited offers for
the Company's vessels from other marine vessel operators. No other party
contacted indicated an interest in matching or exceeding Hvide's offer, and
no other party has approached the Company with an offer equal to or greater
than Hvide's offer.
(e) The consideration to be paid. Hvide will pay cash for the Assets, so
there is no risk involved to the Company or the Stockholders with the form of
consideration. The Board also retained the services of Rauscher Pierce
Refsnes, Inc. to render its opinion regarding whether the consideration to be
paid for the Assets is fair from a financial point of view to the Company's
public Stockholders. Surveys of the vessels as well as current market values
for the vessels were also considered.
The Company's $7,416,000 debt to the Trusts as of March 31, 1996, arose out
of the acquisition by the Company from the Trusts of the marine vessel business
now operated by the Company. The terms of that acquisition were approved by the
Stockholders of the Company at a special meeting of Stockholders held on
December 27, 1977. Pursuant to that initial acquisition of the marine vessel
business, the Company executed notes in favor of the Trusts in the aggregate
amount of $5,925,000, with principal payments due on December 27, 1988 and 1989.
The due date of the principal payments was later extended to December 27, 1990
and 1991. The Company did not make the required principal payments, and the
notes have been in default since then.
The Company has continued to operate since its initial default on its debt to
the Trusts only at the forbearance of the Trusts. From 1986 through 1989, the
Company did not have sufficient income to pay all of the interest on its notes
to the Trusts. During this time, the Company executed additional notes to the
Trusts for the unpaid interest and has not paid any principal or interest on
such notes. Consequently, the Company's debt to the Trusts has been increasing
every year. If the Trusts were to enforce the Company's debt obligations to
them, the Company would be forced to liquidate with no return to the
Stockholders. The Company's Agreement with Hvide is the only outstanding offer
to the Company that will allow the Company to cure its defaults in its
obligations to the Trusts and remain in existence.
The Company has actively solicited other offers for its vessels. While
certain companies expressed an initial interest, none of such companies has been
willing to make a firm offer in excess of Hvide's offer. The
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Board believes that the Company must assign a significant value to Hvide's
guaranty of the Post-Sale Note. In addition, the Board includes the $500,000
reduction in interest debt to the Trusts as part of the consideration to be
received for the Sale. Finally, the Board believes that there should be a value
placed on the possibility that the Company may be able to generate returns for
its Stockholders in the future through its post-Sale acquisition strategy. See
``Business of Seal Fleet Following the Sale - Business Plan for Post-Sale Seal
Fleet''. Despite the fact that the surveys on the Company's vessels appraised
the vessels at an aggregate value in excess of the amount of cash to be paid by
Hvide for the Assets, no purchaser has indicated any interest in matching or
exceeding the Hvide offer, taking into consideration Hvide's guaranty of the
remaining debt to the Trusts and the forgiveness of indebtedness by the Trusts.
Therefore, it appears that the appraised values contained in the surveys exceed
the actual market value of the vessels.
The Board has reviewed the business plan of post-Sale Seal Fleet described
herein. Although the Board will not be responsible for the adoption of or
implementation of such plan, the Board believes that it provides a possibility
for value in the Common Stock in the future.
The Board believes, therefore, that the Hvide offer is the best offer
available to satisfy the Company's obligations and to preserve the Company for a
possible future return to its Stockholders.
INDEPENDENT SURVEYS OF VESSELS
In connection with the Sale, Seal Fleet and Hvide each engaged an independent
appraiser to survey the M/V China Seal, the M/V Hawke Seal and the M/V Pegasus
Seal, Seal Fleet's marine vessels (the ``Vessels''). Seal Fleet engaged the
firm of J.F. Moore, Inc., of Houston, Texas (``JF Moore''), to conduct its
survey of the Vessels and Hvide engaged Dufour Laskay & Associates Inc., of New
Orleans, Louisiana (``Dufour''), to conduct its survey of the Vessels. The
Company's Board of Directors took into account the results of each of these
surveys in its determination of whether to approve and recommend the Sale. The
results of the surveys are set forth below.
JF MOORE SURVEY
JF Moore is a Houston-based organization whose primary business involves
marine engineering and surveying, appraising and loss adjusting for the maritime
industry. It has been in the business of appraising and surveying marine
vessels for 25 years. It has conducted numerous condition and valuation surveys
for vessel's owners, both onshore and offshore, financial institutions and
insurers. JF Moore was selected to conduct its survey by the Company's Board of
Directors based upon the recommendation of John Bissell, the Company's
President, who had worked with JF Moore in the past and who was impressed with
its previous work and its reputation in the maritime industry. During the past
two years, there has been no material relationship between JF Moore, its
affiliates or representatives and Seal Fleet or its affiliates, nor is any such
relationship contemplated in the future.
Set forth below are the definitions of the terms used by JF Moore, which
definitions are accepted by the American Society of Appraisers.
FAIR MARKET VALUE. Fair market value is defined as the value that a willing
seller, not compelled to sell, and a willing buyer, not compelled to buy, will
agree upon in order to conclude the sale of an asset. Fair market value
represents the normalized value of the asset at any given time during a nominal
life expectancy. However, this does not necessarily reflect market conditions
that could influence the buying or selling value so as not to meet the above
definition.
DEPRECIATED VALUE. Depreciated value of marine vessels along with their
associated equipment is derived by taking the estimated new replacement cost,
depreciating that value over the life expectancy of the unit with additional
adjustments for general and operating conditions based on a current physical
survey of the vessel
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and its equipment. It is JF Moore's opinion that under normal considerations,
the fair market value and the depreciated value are equivalent for marine
vessels.
CURRENT MARKET VALUE. Current market value reflects a fair market value
modified for existing market conditions that do not necessarily allow the test
of a willing buyer/seller, not compelled to buy or sell, to be met (i.e., the
market can be depressed so that a distressed or liquidation sale may be near
equal to the current market value). During good market conditions (i.e., where
supply and demand are near equal), the fair market value and the current market
value are considered to be equal. During exceptional market conditions (i.e.,
where supply is less than demand), current market value can, and often does,
exceed the fair market value. During depressed market conditions (i.e., supply
is greater than demand), the current market value is discounted in relation to
the fair market value. The effects of current market conditions are cyclical
and usually short lived.
The current market value factors are judgmental and are determined by review
of comparable actual sales and/or asking prices of offshore units and equipment
as well as other market indicators based on discussions and familiarity with
various manufacturers, designers, contractors and brokers involved in the
operating and trading of such equipment. The actual factors are then applied to
the fair market value to achieve a current market value.
USEFUL LIFE. Based on its research of the history of marine vessels,
particularly offshore supply and service vessels, it is JF Moore's opinion that
a useful life, as a whole, of 25 years is realizable if good maintenance and
replacement programs are established and carried out during a vessel's life.
Additionally, 5-year life spans can be extended for classed vessels based on
satisfactory special survey completion after the initial 25-year life span. JF
Moore generally assumes a maximum 30-year realizable life for classed vessels in
good condition. Individual items of equipment may be separately valued with
considerably lower or higher life expectancy. Adjustments for capital equipment
replacement and maintenance programs can be applied to normalize the depreciated
value.
A maximum depreciation of 36 - 40% over the first 20 years can be applied for
well maintained vessels in good condition, as a whole, where replacement
equipment and steel costs have been incurred. After the 20th year, JF Moore
applies accelerated depreciation to reach a residual value estimated to be a
minimum of 2% of the original value at year 25. This could be influenced by the
physical condition of the vessel and equipment as well as market conditions at
that time.
VALUATION. The appraisals of the Vessels were prepared with a schedule of
estimated new replacement cost, which determined the fair market value based
upon capital equipment and general operating condition, verified by JF Moore's
surveys for both a 25-year and 30-year life. Current market conditions were
also evaluated to determine a current market value.
APPRAISED VALUE. Based upon its survey, JF Moore determined that the current
market values of M/V Pegasus Seal, M/V China Seal and M/V Hawke Seal are in the
range of $2,911,000, $1,738,000 and $2,911,000, respectively, for an aggregate
of $7,560,000. It is the Company's opinion that the JF Moore survey placed too
much emphasis on the replacement value of the Vessels and consequently
overstated the current market for the Vessels.
DUFOUR SURVEY
Dufour is a New Orleans-based organization whose primary business involves
marine surveying, appraising and consulting. It has conducted numerous
condition and valuation surveys for vessel owners, both onshore and offshore,
financial institutions and insurers. Dufour was selected to conduct its survey
by Hvide's management. Dufour has conducted surveys for Hvide in the past and
Hvide wanted a consistent appraisal for purposes of comparison to its vessels.
Except for similar survey work, during the past two years, there has been no
material relationship between Dufour, its affiliates or representatives and
Hvide or its affiliates, nor
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is any such relationship contemplated in the future, although Dufour will
probably continue to perform surveys for Hvide.
VALUATION. There are three distinct approaches that may be employed in
developing an opinion of value. The applicability and validity of each approach
in valuing a specific property depends upon the property being appraised, the
purpose of the appraisal, and the available information. The three approaches
to valuation are the market approach, the cost approach, and the income
approach. In this analysis, Dufour used the cost and market approaches as
described below. The income approach was not used due to the lack of data, the
constantly changing data, and the vessels involved.
In determining the fair market value of each Vessel, Dufour used the same
basic format as employed by JF Moore. Dufour determined the Vessel's
reproduction cost - the cost of building a new vessel of like design,
horsepower, and capacity at the prevailing market rates. This value was then
depreciated over the expected useful life of a similar piece of equipment -
generally 20 to 30 years - and subsequently adjusted either up or down for the
assumed condition of the vessel at time of valuation. A vessel which had
recently been rebuilt or repowered would have years added to its remaining
expected useful life. Conversely, a vessel in need of repairs, maintenance, or
repowering would have years removed from its remaining expected useful life.
Finally, the value is adjusted to reflect Dufour's opinion of the current market
for the particular type of vessel involved. This adjustment is subjective by
nature, but is based on Dufour's constant contact with owners, operators,
brokers, buyers, and sellers of all types of vessels, and information on
comparable sales.
For appraisal purposes, market value is defined as a sum of money that a
vessel should bring in a competitive and open market under all conditions
requisite to a fair sale, the buyer and seller each acting prudently,
knowledgeably, and assuming the price is not affected by undue stimulus.
Implicit in this definition is the consummation of a sale whereby title is
passed from seller to buyer under conditions whereby: (i) buyer and seller are
typically motivated; (ii) both parties are well informed and acting in what they
consider their own best interests; and (iii) a reasonable time is allowed for
exposure on the open market.
Reproduction cost is based on the cost of construction of a vessel of similar
size and capacity in today's market. Reproduction cost was arrived at by
computing the construction costs derived from the product of the vessel's
displacement and present day labor-per-ton estimate. Replacement costs of
equipment, machinery, and fittings were added to obtain a present day
replacement value. The reproduction cost was also obtained from area standard
quotes for new construction of similar vessels.
Market value was arrived at after determining the estimated replacement value
of the vessel, depreciated for age, considering a 20-year expected life, and
adjusted for the assumed condition of the vessel and market conditions as of the
retrospective appraisal date.
APPRAISED VALUE. Based upon its survey, Dufour determined that the estimated
fair market values of M/V Pegasus Seal, M/V China Seal and M/V Hawke Seal are in
the range of $2,450,000 $1,550,000 and $2,350,000, respectively, for an
aggregate of $6,350,000.
OPINION OF RAUSCHER PIERCE REFSNES, INC.
Rauscher Pierce Refsnes, Inc. (``RPR'') was engaged by Seal Fleet to render
an opinion (``Opinion'') as to whether the Sale is fair, from a financial point
of view, to the public holders of the Company's Class A Stock (the
``Unaffiliated Stockholders''). RPR, as part of its investment banking
business, is continually engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, secondary distributions of listed and unlisted securities,
private placements and valuations for estate, corporate and other purposes. The
subcommittee of the Board of Directors, established for the purpose of selecting
an investment banker, interviewed, and selected from, three investment bankers
who indicated an interest in being engaged for the purpose of rendering a
fairness opinion to the Company. RPR was selected to give its opinion based
upon its presentation to the subcommittee and because RPR is
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a nationally recognized investment banking firm with substantial experience in
transactions similar to the Sale. During the past two years, there has been no
material relationship between RPR, its affiliates or representatives and Seal
Fleet or its affiliates, nor is any such relationship contemplated in the
future.
On April 25, 1996, RPR delivered its written Opinion to the Board of
Directors to the effect that, as of the date of the written Opinion, the Sale
was fair to the Unaffiliated Stockholders from a financial point of view. RPR's
Opinion does not constitute a recommendation to any Stockholder of Seal Fleet as
to how such Stockholder should vote at the Annual Meeting. The full text of the
RPR written Opinion dated April 25, 1996, which sets forth the assumptions made,
matters considered, limitations on and the scope of the review undertaken and
procedures followed by RPR in rendering its Opinion is attached as Exhibit B to
this Proxy Statement. Stockholders of Seal Fleet should carefully read the
Opinion in its entirety.
In rendering its Opinion, RPR, among other things: (i) reviewed the
Agreement; (ii) reviewed the Asset Purchase Agreement (the ``Trusts Agreement'')
between Hvide, the Trusts and the Partnerships; (iii) reviewed Seal Fleet's Form
10-KSBs for the years ended December 31, 1995 and 1994; (iv) reviewed Seal
Fleet's Form 10-QSBs for the quarters ended March 31, June 30, and September 30,
1995 and 1994; (v) reviewed the surveys of the Company's vessels by JF Moore and
Dufour; (vi) reviewed the Company's statement of assets to be sold and statement
of vessel operations for the period January 1, 1995 through September 30, 1995,
and the years ended December 31, 1994, 1993 and 1992; (vii) reviewed the
Company's estimate prepared on April 16, 1996, of pro forma ``post-closing''
balance sheet assets and liabilities as of December 31, 1995, for the Company
after the Sale; (viii) reviewed the Company's 1996 revenue and operating cost
budgets; (ix) reviewed the Company's master time charter agreement for M/V China
Seal and M/V Hawke Seal; (x) considered such other information, financial
studies, analyses and investigations as it deemed relevant under the
circumstances; and (xi) discussed with management of the Company the outlook for
future operating results, the assets and liabilities of the Company, material in
the foregoing documents, and other matters it considered relevant for its
inquiry.
In rendering its Opinion, RPR relied on the accuracy and completeness of the
financial, operating and other information provided to it and assumed that such
information had been reasonably prepared on bases reflecting the best currently
available estimates and judgments. RPR did not independently verify such
information or make an independent evaluation or appraisal of the assets or
liabilities of Seal Fleet nor was RPR furnished with any such evaluations or
appraisals, other than the JF Moore survey and the Dufour survey referred to
above. RPR was not asked to, and did not, participate in the structuring or
negotiation of the terms of the Sale. The RPR Opinion is rendered on the basis
of conditions in the maritime markets prevailing as of the date of the Opinion
and the condition and prospects, financial and otherwise, of Seal Fleet as they
were represented to RPR as of the date of its Opinion or as they were reflected
in the materials and discussions referred to above. Seal Fleet did not place
any limitations upon RPR with respect to the procedures followed or the factors
considered by RPR in rendering its Opinion.
RPR believes that its analysis must be considered as a whole and that
selecting portions of its analysis and of the factors considered by it, without
considering all factors and analyses, could create a misleading view of the
process underlying the Opinion. The preparation of a fairness opinion is a
complex process and is not necessarily susceptible to partial analysis or
summary description. In its analysis, RPR made numerous assumptions with
respect to industry performance, general business, regulatory and economic
conditions and other matters, many of which are beyond the control of Seal
Fleet. Any estimates used are not necessarily indicative of future results,
which may be significantly more or less than the estimates. Estimates of values
of companies or their assets used in the RPR analysis do not purport to be
appraisals or necessarily reflect the prices at which companies or assets may
actually be sold. RPR and Seal Fleet assume no responsibility for their
accuracy.
In rendering its Opinion, RPR performed the financial analyses summarized
below. The summary below does not purport to be a complete description of the
analysis performed by RPR in this regard.
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ANALYSIS. In conducting its analysis and arriving at its Opinion, RPR
considered such financial and other factors as it deemed appropriate under the
circumstances, including, among others, the following: (i) the terms of the
Agreement and the Trusts Agreement; (ii) the value of the consideration offered
by Hvide, including the value of Hvide's guaranty of the Post-Sale Note to the
Trusts and the value to the Unaffiliated Stockholders of continuing Seal Fleet
as a going concern; (iii) that the purchases of vessels from Seal Fleet and the
Trusts were a ``package deal'' and that if another sale of Seal Fleet's vessels
were arranged, the Trusts would not be obligated to forgive $500,000 of Seal
Fleet's debt; (iv) the value of the consideration being paid to the Trusts for
their vessels; (v) the JF Moore Survey and the Dufour Survey of the Vessels;
(vi) Seal Fleet's bareboat charter agreements and brokerage business; (vii) Seal
Fleet's financial projections and historical financial results; (viii) the lack
of other firm offers that would materially increase the aggregate consideration
to be paid by Hvide; (ix) the rate of return a buyer would expect to receive
from its investment in the Vessels; (x) the value of Seal Fleet's commission
income; (xi) the pro forma assets and liabilities of Seal Fleet following the
Sale; (xii) its discussions with management of Seal Fleet concerning its
operations; (xiii) the market value of the Class A Stock; (xiv) the fact that
Seal Fleet is currently in default on approximately $7,302,000 of debt and such
debt is immediately due and payable; and (xv) financial terms of selected sales
of marine vessels by third parties. RPR also considered the prevailing market
prices of the shares of Seal Fleet, but determined that such prices did not
reflect the per share value of 100% of the Company or consideration of all
relevant facts.
COMPENSATION. As compensation for rendering its Opinion to Seal Fleet, Seal
Fleet paid RPR a fee of $50,000, plus reasonable out-of-pocket expenses. In
addition, Seal Fleet agreed to indemnify RPR for liabilities incurred in
connection with rendering the Opinion, including liabilities under the federal
securities laws.
INTERESTS OF CERTAIN PERSONS IN THE SALE
The Company's management and Board of Directors may be deemed to have certain
interests in the Sale that are in addition to their interests as stockholders of
the Company generally. See ``Election of Directors - Certain Transactions''.
A portion of the proceeds of the Sale ($3,876,000, assuming the Sale closes
on July 31, 1996) will be paid to the Trusts and, upon consummation of the Sale,
the Trusts will forgive $500,000 of the Company's interest indebtedness to the
Trusts. At a July 31, 1996, closing of the Sale, the Company's indebtedness to
the Trusts would thus be reduced from $7,376,000 to $3,000,000. In addition,
the Company's $1,937,000 ship mortgages (at July 31, 1996) to National Western
Life Insurance Company and the Company's $500,000 debenture payable to National
Western Life Insurance Company will be paid in full. (Assuming the Company
continues to make payments into a sinking fund, the debenture would have an
outstanding balance of $100,000 at July 31, 1996.) National Western Life
Insurance Company is considered an affiliate of the Trusts. At July 31, 1996,
the Company will owe its affiliates approximately $9,657,000 for money borrowed,
plus interest, and will not owe any non-affiliates for money borrowed. The
Company anticipates that all liabilities to non-affiliates, represented by
accounts payable, will be paid out of the proceeds of the collection of its
accounts receivable following the closing. If closing were to occur on July 31,
1996, total payments to affiliates would be approximately $6,157,000, with all
of such amount being provided by the proceeds of the Sale. In addition, the
amounts owed to affiliates will be reduced by the $500,000 forgiveness of
indebtedness by the Trusts. No amounts will be paid to any party prior to the
payment of more senior obligations owed to any other party.
The Trusts, which own 212,655 shares (10.72%) of the Class A Stock and 50,000
shares (100%) of the Class B Stock, are simultaneously selling such shares to
Hvide, as well as the five marine vessels beneficially owned by them and managed
by the Company. The total purchase price payable to the Trusts for the vessels
and Seal Fleet stock is $10,500,000, payable in cash. Hvide engaged Dufour to
survey the five marine vessels that Hvide is purchasing from the Trusts. Dufour
appraised the Trusts' vessels to have an aggregate value of $10,400,000. The
Company believes that the vessels owned by the Trusts are substantially similar
to those
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owned by the Company and that the consideration being paid to the Trusts for its
vessels is comparable to that being paid to the Company for the Vessels.
Simultaneously with the sale of the Trusts's shares of Common Stock in the
Company to Hvide, Hvide will resell 37,600 shares of Class A Stock and all of
the shares of Class B Stock purchased from the Trusts to Magnum, and Hvide will
guaranty the $3,000,000 Post-Sale Note, representing all of the Company's then
remaining indebtedness to the Trusts. Following the Sale, Hvide and Magnum will
control Seal Fleet and will appoint a new Board of Directors and new executive
management for Seal Fleet. See ``Business of Seal Fleet Following the Sale''.
During 1995, the Company received revenues of approximately $262,400 for
brokerage services it rendered for a subsidiary of Hvide.
CERTAIN RIGHTS OF HOLDERS OF CLASS B STOCK
The holders of the Class B Stock have the right to elect a majority of the
Board of Directors of the Company. The Class B Stock is currently owned by the
Trusts. If the Sale is approved and consummated, a portion of the Class A Stock
and all of the Class B Stock will be transferred to Magnum. See ``Business of
Seal Fleet Following the Sale''.
DISSENTERS' RIGHTS
The Stockholders of the Company do not have any dissenters' or appraisal
rights with respect to the Sale.
MARKET FOR THE COMPANY'S COMMON STOCK
The information under the caption ``Market for the Company's Common Stock and
Related Stockholder Matters'' included in pages 7 and 8 of the Annual Report is
incorporated herein by reference. On March 29, 1996, the last trading day prior
to the announcement of the Agreement to make the Sale, the average of the bid
and asked sales prices of the Class A Stock was $0.313, with only 500 shares
traded.
GOVERNMENT APPROVALS
Other than compliance with securities laws relating to proxy solicitation, no
government approvals or authorizations must be obtained by the Company in
connection with the Sale. The acquisition of marine vessels and Common Stock by
Hvide from the Trusts, which must close contemporaneously with the Sale, must be
reported to the Federal Trade Commission and the U.S. Department of Justice, and
may not be consummated prior to the expiration or early termination of the
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.
BUSINESS AND POLICIES OF THE COMPANY FOLLOWING THE SALE
Following the consummation of the Sale, the Board of Directors elected by the
Stockholders will resign and be replaced by the directors selected by Magnum.
The Company will then proceed to collect its receivables, pay its payables and
wind down its business. Following the winding down period, the Company will
look for acquisition candidates in order to put the Company into a new line of
business. For a description of the business and properties of the Company after
the Sale, see ``Business of Seal Fleet Following the Sale''.
RISK FACTORS
If the Sale is approved by the Stockholders and consummated as described
herein, the Company will become an acquisition company with a new Board of
Directors and new executive management. As an
15
<PAGE>
acquisition company, Seal Fleet will become subject to a number of business
risks to which it is not now subject. See ``Business of Seal Fleet Following
the Sale - Risk Factors''.
TAX TREATMENT OF SALE
The Sale will be reported as a sale of assets for federal income tax
purposes. The resulting gains from the Sale and from the extinguishment of debt
will be reported as taxable income by the Company. These gains will be offset
in part by net operating loss carryforwards approximating $8,200,000. It is
estimated that the federal income tax cost of the transaction will be
approximately $135,000 due to anticipated limitations on the utilization of
these loss carryforwards under the ``Alternative Minimum Tax'' provisions of the
Internal Revenue Code. The Company has not received an opinion of counsel
regarding the tax consequences of the Sale. The foregoing description of the
tax consequences of the Sale is based upon the Company's review of its current
tax status and its review of applicable tax law and regulations.
FINANCIAL INFORMATION ABOUT THE COMPANY
The following sets forth summary historical financial data of the Company for
the two years ended December 31, 1995 and for the quarters ended March 31, 1995
and 1996. This data should be read in conjunction with the Financial Statements
of the Company, the Notes thereto and Management's Discussion and Analysis of
Financial Condition and Results of Operations, incorporated by reference herein
from pages 8 through 23 of the Company's Annual Report, the Company's March 31,
1996 financial statements and notes thereto and Management's Discussion and
Analysis of the Condensed Consolidated Statements of Operations for the Quarter
Ended March 31, 1996, included herein.
SEAL FLEET, INC.
CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEARS ENDED QUARTER ENDED
DECEMBER 31, MARCH 31,
------------------------------------ --------------
1994 1995 1995 1996
----------- ---------- -------------- --------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues.............................. $ 7,133 $ 6,543 $ 1,563 $ 1,771
Income from Operations................ 1,264 663 57 277
Net income (loss)..................... 478 (116) (159) 101
Net income (loss) per common share.... $0.23 $ (0.06) $(0.08) $ 0.05
DECEMBER 31, DECEMBER 31, MARCH 31, MARCH 31,
1994 1995 1995 1996
---- ---- ---- ----
BALANCE SHEET DATA:
Property and equipment, net........... $ 3,240 $ 2,736 $ 3,117 $ 2,622
Total assets.......................... 11,805 10,394 10,222 11,257
Total debt............................ 10,462 10,200 10,505 10,117
Total stockholders' equity (deficit).. (3,505) (3,621) (3,664) (3,520)
</TABLE>
16
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1996
Consolidated net revenues for the quarter ended March 31, 1996, as compared
to the same period in 1995, increased by over $208,000, or 13%, due to an
increase in charter rates of Company-owned vessels working in the Gulf of
Mexico. This increase started in late 1995 and has continued into 1996.
Charter revenues increased by 13% while operating fees increased by 21%.
Commissions earned by the travel agency increased by 32% over the same quarter
of the previous year, and the Company had no crewing revenues.
Operating expense decreased during the current quarter as compared with the
same quarter in 1995 by approximately 4%. This decrease was due to a decrease
in foreign crew transportation cost and a reduction in insurance claims related
to crew members.
General and administrative expense increased by approximately 7% due to an
increase in travel expense, legal expense and sales commissions.
Depreciation expense decreased by 7% because certain assets have become fully
depreciated. Interest expense decreased by 8% due to reduction of debt.
Had the Sale been consummated on March 31, 1996, following the consummation
of the Sale the Company would have had total assets of $3,880,000 and total
liabilities of $4,510,000. Following such closing, the Company will have only
its travel agency business to generate income. The Company does not anticipate
that the travel agency business will be able to generate sufficient income to
meet the Company's debt service and, in any event, the travel agency business
may be sold or otherwise discontinued. The Company's ongoing ability to meet
its debt service obligations will be dependent on its ability to successfully
complete a business combination with an entity with sufficient cash flow to meet
the Company's obligations. Without such an acquisition, the Company will not be
able to meet its debt service obligations to the Trusts, and the Trusts would
look to the Hvide guaranty for payment. However, if Hvide is required to make
payments to the Trusts pursuant to its guaranty, the Company is obligated to
reimburse Hvide for such payments.
THE SALE AGREEMENT
EFFECTIVE TIME OF THE SALE
The Agreement provides that the Sale will become effective at a closing
(``Effective Time'') at which the purchase price will be paid and title to the
Assets will be transferred to Hvide. It is anticipated that, if the Sale is
approved and all other conditions to the Sale have been satisfied or waived, the
Effective Time will occur within thirty days after the Annual Meeting. If the
closing has not occurred by August 15, 1996, either the Company or Hvide may
terminate the transaction in its sole discretion. A copy of the Agreement is
attached as Exhibit A to this Proxy Statement and is incorporated herein by
reference.
REPRESENTATIONS AND WARRANTIES
In the Agreement, Seal Fleet, Hvide and Ferguson have made various
representations and warranties concerning, among other things, Seal Fleet's
title to the Assets, the satisfaction of certain legal requirements for the
Sale, the future nature of the Company's business, and the existence of certain
litigation matters. The representations and warranties of each party to the
Agreement will survive the closing of the Sale.
CONDITIONS TO THE SALE
The respective obligations of the Company and Hvide to consummate the Sale
are subject to the satisfaction of certain conditions, including the following:
17
<PAGE>
(a) the representations and warranties of the parties to the Agreement
remaining true and correct;
(b) the Sale shall have been approved by the Company's Stockholders as
herein described;
(c) compliance with any filing and waiting period requirements of the
Hart-Scott-Rodino Antitrust Improvements Act;
(d) results of an independent survey of the Assets not showing a value in
excess of the purchase price;
(e) closing of the sale of their vessels by the Partnerships and the sale
by the Trusts of their shares of Company Common Stock;
(f) payment of Seal Fleet's debt secured by the Assets and rearrangement
of the remaining debt, as herein described;
(g) the receipt of an opinion from an investment banking firm in form and
substance satisfactory to the Company's Board of Directors; and
(h) receipt of the purchase price.
The obligation of Hvide to consummate the purchase of the Assets is also
subject to the satisfaction of the following additional conditions:
(a) approval of the purchase by Hvide's lenders;
(b) settlement of accounts with the Partnerships, as herein described; and
(c) obtaining financing of the purchase under terms and conditions
reasonably satisfactory to Hvide.
TERMINATION OR AMENDMENT OF THE AGREEMENT
The Agreement may be terminated at any time prior to the Effective Time,
either before or after approval of the Sale by the Company's Stockholders, as
follows:
(a) by the mutual consent of the Boards of Directors of the Company and
Hvide; and
(b) by either the Company or Hvide, if the Effective Time has not occurred
by August 15, 1996.
The Agreement may be amended at any time before or after approval of the Sale
by the Stockholders, by written agreement executed and delivered by duly
authorized officers of the respective parties to the Agreement. Moreover,
except for the statutory conditions requiring shareholder approval, the
conditions to the Sale and the termination provisions in the Agreement may be
waived by the parties to the Agreement. If the closing does not occur by August
15, 1996, for any reason other than failure of the Stockholders to approve the
Sale or a material breach of the Agreement by Seal Fleet, Hvide must pay
$200,000 to the Company.
EXPENSES OF THE SALE
All costs and expenses incurred in connection with the Sale will be paid by
the party incurring the expense.
18
<PAGE>
BUSINESS OF SEAL FLEET FOLLOWING THE SALE
As a result of the Sale, substantially all of the Company's assets will be
sold, its debts will be rearranged and reduced and the Company will become an
acquisition company with a new Board of Directors and new executive officers.
Set forth below is a description of the Company's business as proposed to be
operated by Magnum following consummation of the Sale. The Stockholders of the
Company will not have an opportunity to vote separately on the sale of assets
and the change in the nature of the Company's business. A vote for the Sale is
also a vote for a change in the Company's business. However, see ``Stockholder
Approval of Initial Significant Business Combination'' below regarding Magnum's
intention to have Stockholders approve a future acquisition. Following the
consummation of the Sale, Hvide and Magnum will own 10.72% of the Class A Stock
and 100% of the Class B Stock and will consequently have the ability to appoint
a majority of the Company's Board of Directors to effect the business plan
described below. Consequently, a vote in favor of the Sale will effectively
constitute a vote in favor of changing the nature of the Company's business.
See ``Risk Factors'' below for a description of certain business risks inherent
in changing the Company into an acquisition Company.
PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma financial information reflects the following:
. The sale by Seal Fleet to Hvide of the Company's three vessels, the Company's
two bareboat charters and inventory related to such vessels and customer
agreements for the use of such vessels (collectively, the ``Assets'') for a
cash purchase price of $6,300,000.
. The application by Seal Fleet of the proceeds of the Sale to the payment of
all debt secured by the Company's vessels, payment of the Company's bond due
in August 1996 ($100,000 of principal on the bond was paid to a sinking fund
on March 31, 1996), and the reduction of its debt to the Trusts.
. The forgiveness by the Trusts of $500,000 of interest due to the Trusts and
the acceptance by the Trusts of a new note (the ``Post-Sale Note'') for the
unpaid balance of the debt to Trusts in the amount of $3,000,000. The Post-
Sale Note will bear interest at 10% per annum, with principal and interest
payable monthly in arrears based upon a 60-month amortization schedule for a
36-month period, with any remaining principal and interest due and payable in
full on the last day of the 37th month.
. The discontinuation of the Company's brokerage business.
. The pro forma information does not give effect to the possible sale, after
closing, of 277,778 shares of Class A Stock held in treasury to Magnum for
$100,000.
For accounting purposes, the Sale is presented as a sale of assets
transaction.
The unaudited pro forma balance sheet as of March 31, 1996, gives effect to
the proposed Sale as if it had occurred on March 31, 1996.
Had the Sale been consummated on March 31, 1996, following the consummation
of the Sale the Company would have had total assets of $3,880,000 and total
liabilities of $4,510,000. Immediately following such closing, the Company will
have only its travel agency business to generate income. The Company does not
anticipate that the travel agency business will be able to generate sufficient
income to meet the Company's debt service and, in any event, the travel agency
business may be sold or otherwise discontinued. Following the Sale, the Company
will be transformed into an acquisition company. Consequently, the Company's
ongoing ability to meet its debt service obligations will be dependent on its
ability to successfully complete a
19
<PAGE>
business combination with an entity with sufficient cash flow to meet the
Company's obligations. See ``Risk Factors'' for a description of certain
business risks inherent in changing the Company into an acquisition company. If
the Company defaults on its obligation to the Trusts, the Trusts will have
recourse against Hvide under its guaranty. However, if Hvide is required to
make any payments to the Trusts pursuant to its guaranty, the Company will be
obligated to reimburse Hvide for such payments.
The following unaudited pro forma information is provided for comparative
purposes only. The unaudited pro forma information presented is based upon the
historical financial statements of the Company and should be read in conjunction
with such financial statements and the related notes thereto which are included
elsewhere herein or incorporated herein by reference.
The pro forma data are based upon assumptions and include adjustments as
explained in the notes to the unaudited pro forma financial statements, and the
actual recording of the transaction could differ. The actual recording of the
transaction will reflect actual costs incurred in connection with the Sale,
which could differ from the estimates used in the pro forma financial
statements, and the results of business operations between the date of the pro
forma data and the actual closing date.
20
<PAGE>
SEAL FLEET, INC. AND SUBSIDIARIES
Historical and Pro Forma Condensed Consolidated Financial Data
(in thousands of dollars)
<TABLE>
<CAPTION>
(AS REPORTED) (UNAUDITED)
HISTORICAL HISTORICAL PRO FORMA
DECEMBER 31, MARCH 31, PRO FORMA MARCH 31,
1995 1996 ADJUSTMENTS 1996
------------ ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
- ------------------------------------------
Current Assets
Cash................................... $ 1,055 $ 1,503 $ 6,200(a) $ 603
(2,701)(b)
(3,916)(c)
(547)(d)
64 (e)
Accounts receivable - trade............ 4,694 4,876 (3,459)(f) 2,791
124 (f)
1,250 (d)
Accounts receivable - related party.... 758 703 (703)(d) 0
Accounts receivable - other............ 133 145 145
Materials and supplies................. 66 65 (65)(a) 0
Deferred drydocking costs.............. 294 700 (700)(a) 0
Other current assets................... 112 97 (64)(e) 33
------- ------- ------ ------
Total current assets................ 7,112 8,089 (4,517) 3,572
Property and Equipment
Ships.................................. 9,922 9,922 (9,922)(a) 0
Furniture and equipment................ 223 210 30 (a) 240
Leasehold improvements................. 124 123 123
------- ------- ------ ------
10,269 10,255 (9,892) 363
Less accumulated depreciation.......... 7,533 7,633 (7,388)(a) 245
------- ------- ------ ------
2,736 2,622 (2,504) 118
Other Assets
Deferred drydocking costs-non current.. 356 356 (356)(a) 0
Assets held for resale................. 154 154 154
Other assets.......................... 36 36 36
------- ------- ------ -----
Total assets $10,394 $11,257 $(7,377) $3,880
======= ======= ====== ======
</TABLE>
21
<PAGE>
SEAL FLEET, INC. AND SUBSIDIARIES
Historical and Pro Forma Condensed Consolidated Financial Data
(in thousands of dollars)
<TABLE>
<CAPTION>
(AS REPORTED) (UNAUDITED)
HISTORICAL HISTORICAL PRO FORMA
DECEMBER 31, MARCH 31, PRO FORMA MARCH 31,
1995 1996 ADJUSTMENTS 1996
---------------- ------------- ------------- --------
<S> <C> <C> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
- --------------------------------------------------------
Current Liabilities
Current portion of long-term debt to related party... $ 7,560 $ 7,460 $ (805)(b) $ 600
(6,055)(c)
Accounts payable - trade............................. 3,815 4,560 135 (g) 1,510
(3,211)(f)
(124)(f)
150 (h)
Accrued interest expense............................. 877 991 (230)(b) 0
(261)(c)
(500)(g)
Other liability...................................... 100 (100)(a) 0
------ ------- ----------
Total current liabilites............................. 12,252 13,111 (11,001) 2,110
Long-term debt to related party less current portion.. 1,763 1,666 (1,666)(b) 2,400
................................................. 2,400 (c)
---------- --------- ----------- ---------
Total liabilities................................ 14,015 14,777 4,510
Shareholders' Equity
Class A common stock, $.10 par value; 3,700,000
shares authorized and 2,432,248 shares issued...... 243 243 243
Class B common stock, $.10 par value; 50,000
shares authorized, issued and outstanding.......... 5 5 5
Additional paid-in capital........................... 4,456 4,456 4,456
Retained deficit.................................... (8,195) (8,094) 2,525 (a) (5,204)
365 (g)
Class A common stock held in treasury at
cost; 447,621 shares............................... (130) (130) (130)
------- ------- -------
Total Shareholders' Equity (deficit)............... (3,621) (3,520) (630)
------- ------- -------
$10,394 $11,257 $3,880
======= ======= =======
</TABLE>
See notes below
22
<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(a) To record the sale of three marine vessels, two bareboat charters and
related assets for $6,300,000 in cash. A deposit of $100,000 was received
in March 1996.
(b) To record the payment of the mortgage note and the debenture to National
Western Life Insurance, including accrued interest, aggregating $2,701,000.
A $100,000 payment to a sinking fund on the debenture was paid in March
1996.
(c) To record the payment of the notes and accrued interest to the Trusts,
excluding the $3,000,000 new Seal Fleet note guaranteed by Hvide and
$500,000 of accrued interest forgiven by the Trusts.
(d) To record the final accounting between Seal Fleet and the Trusts as of March
31, 1996.
(e) To record reimbursement from insurance company of prepaid marine insurance
policy of $64,000 as of March 31, 1996.
(f) To eliminate the brokerage accounts receivable ($3,459,000) and related
accounts payable ($3,211,000) and commission payable ($124,000) transferred
to Mr. McIngvale and to record 50% of the commissions receivable ($124,000).
(g) To record the $500,000 debt forgiveness and potential federal income tax
liability of $135,000 on debt discharge gain.
(h) To record $150,000 of estimated printing, mailing, solicitation, investment
banking, accounting and legal costs of the Sale.
CHANGE OF DIRECTORS/MANAGEMENT
Following the closing of the Sale, each officer and director of Seal Fleet
then holding office will resign. Magnum has informed the Company that the
following individuals will then be appointed to be officers and directors of the
Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Donald L. Caldera 60 Chairman and Class B
Director
Thomas M. Ferguson 56 President, Chief Executive
Officer and Class B Director
J. Erik Hvide 47 Class A Director
James S. Goodner 54 Chief Financial Officer
</TABLE>
23
<PAGE>
The following is a brief description of the background and principal
occupation of each person whom Magnum has indicated will be an officer and
director of Seal Fleet following the closing of the Sale:
DONALD L. CALDERA
Executive Vice President, Development
HVIDE MARINE INCORPORATED
Following the Sale, Mr. Caldera will be appointed to serve as a Class B Director
and Chairman of Seal Fleet. Mr. Caldera is Executive Vice President,
Development, of Hvide. He has been President of Hvide Holdings, Inc. since June
1993, and was elected a director of Hvide in April 1994. From November 1990 to
January 1992, he was Chief Executive Officer of Global Sovcruise Lines, a Swiss-
Soviet shipping venture. Between 1985 and June 1990, he was Chairman and Chief
Executive of Norex-America, Inc. (formerly Bermuda Star Lines, Inc.), a publicly
traded cruise ship line. Between 1980 and 1985, Mr. Caldera served as Senior
Vice President-Marketing and Sales of Midland Enterprises, Inc., a diversified
inland waterways company. From 1976 to 1980, he was Executive Vice President
and Chief Operating Officer of Interocean Management Corporation, a firm
managing foreign-flag and US-flag tankers. Mr. Caldera received his BS in Naval
Architecture from The Webb Institute and his J.S.D. from Yale Law School.
THOMAS M. FERGUSON
Chairman
FIRST STANFORD CORPORATION
(Business Advisory Services)
Chairman, President
FIRST MAGNUM CORPORATION
Following the Sale, Mr. Ferguson will be appointed to serve as a Class B
Director and as President and Chief Executive Officer of Seal Fleet. Since
1992, he has been a director, Chairman and President of First Stanford
Corporation, a private advisory company engaged in providing services
principally with respect to maritime transactions and the development of
business and financial plans and strategies for national and international
companies, as well as restructuring programs for privately held companies.
During this period, Mr. Ferguson developed business and financial strategies for
Hvide, Keystone Brewers Inc., Octel Communications Corporation and Ventana
Financial Services Inc. From 1987 to 1992, he was a director and Chairman and
President of FTM Holdings Inc., a privately held financial holding company
engaged in the development and capitalization of transportation and financial
services companies. Mr. Ferguson served as President of Lenders Corporation, a
privately held diversified financial services company engaged in mortgage
banking and real estate, from 1985 to 1987. From 1983 to 1985, he was Managing
Director of Perini America Company, a corporation engaged in the development of
real estate properties in south Florida. Mr. Ferguson is the sole stockholder
of First Magnum Corporation, and its sole director and officer. Mr. Ferguson
received a BA degree from Florida State University.
J. ERIK HVIDE
Chairman and Chief Executive Officer
HVIDE MARINE INCORPORATED
(Diversified Marine Services)
Following the Sale, Mr. Hvide will be appointed to serve as a Class A Director.
He has been Hvide's Chairman since September 1994 and its President and Chief
Executive Officer since January 1991. From 1981 until 1991, Mr. Hvide was
President and Chief Operating Officer of Hvide. He has been employed by Hvide
in various capacities since 1970 and became Vice President in 1973. He is also
a director of the Executive
24
<PAGE>
Committee of American Waterways Operators, a participant on the Transportation
Committee of the American Petroleum Institute, a member of the American Bureau
of Shipping, a past Chairman of the Board of the American Institute of Merchant
Shipping and a past appointee to the US Coast Guard's Towing Safety Advisory
Committee. Mr. Hvide is a graduate of the University of Miami School of
Business Administration.
JAMES S. GOODNER
Partner
HOCKADAY-GOODNER ASSOCIATES
(Business Advisory Services)
Following the Sale, Mr. Goodner will be appointed as Chief Financial Officer of
Seal Fleet. Mr. Goodner has served as an advisor to domestic and international
firms from 1986 to 1996, most recently as a partner of Hockaday-Goodner
Associates. Among many assignments, in 1994-1995 he served as interim Chief
Financial Officer during the privatization of La Caja de Ahorro y Seguro,
Argentina's largest insurance company. In 1991-1992, he assisted Global
Sovcruise Lines and Inter Maritime Management, Inc., both of Geneva, in the
development of Swiss-Soviet joint ventures in cruise, shipping and port
operations. Mr. Goodner lived in Venezuela from 1970 to 1985, where he was
Chief Financial Officer for the Seagram Company Limited subsidiary in Venezuela
and, before that, Marketing Manager and Controller for the Eminca Group, a
Westinghouse group of major appliance manufacturing and distribution companies
in Venezuela. Mr. Goodner is an Adjunct Professor of International Marketing
and International Business at Jersey City State College. He received his BS and
MBA degrees from Indiana University.
BUSINESS PLAN FOR POST-SALE SEAL FLEET
INTRODUCTION
Seal Fleet will be transformed to serve as a vehicle to effect acquisitions,
whether by merger, exchange of capital stock, acquisition of assets or other
similar business combination (a ``Business Combination''), with an operating
business (an ``Acquired Business''). The business objective of the transformed
company (hereinafter, ``Post-Sale Seal'') will be to effect a Business
Combination with an Acquired Business which Post-Sale Seal believes has
significant growth potential. Post-Sale Seal intends to utilize cash, equity,
debt or a combination thereof in effecting a Business Combination. While Post-
Sale Seal may, under certain circumstances, explore Business Combinations with
more than one Acquired Business, in all likelihood, until other financing
provides additional funds, or its stature matures, Post-Sale Seal may be able to
effect only a single major Business Combination in accordance with its business
objective. See ``Risk Factors'' for important factors that should be considered
in connection with the realization of Post-Sale Seal's business objective.
FIRST MAGNUM CORPORATION
First Magnum Corporation (``Magnum'') is a Florida corporation wholly owned
and controlled by Ferguson. Magnum has offered to purchase certain Seal Fleet
Common Stock as hereinafter described upon the consummation of the Sale.
TRANSITION ACTIVITIES
At the closing of the Sale, the marine assets of the Company will be sold.
In transition, certain current staff of the Company will be employed to invoice
and collect funds and pay creditors relating to the marine assets. Post-Sale
Seal will thereafter own a travel agency and certain miscellaneous assets, have
certain liabilities (including the Post-Sale Note), and ongoing requirements to
meet regulatory and shareholder
25
<PAGE>
obligations while the business plan is being implemented. During the transition
period, Post-Sale Seal will evaluate its remaining assets with the objective of
maximizing their value. This may result in a liquidation of some or
substantially all of such assets.
INITIAL TRANSACTIONS
No agreements, commitments or understandings have been made with any Acquired
Business candidates. No assurances can be made that future discussions will
result in definitive agreements, although it is Magnum's intention to diligently
proceed to progress Post-Sale Seal's business plan.
STOCKHOLERS APPROVAL OF INITIAL SIGNIFICANT BUSINESS COMBINATION
Magnum intends to cause Post-Sale Seal, prior to the consummation of its
initial significant Business Combination, to submit such transaction to Post-
Sale Seal's stockholders for their approval, even if the nature of the
acquisition is such as would not ordinarily require stockholder approval under
applicable state law. The officers and directors of Post-Sale Seal, who will,
with their affiliates, (following the purchase of shares of Class A Stock by
Magnum) control in the aggregate 490,433 shares of Class A Common Stock (21.7%)
and 50,000 shares of Class B Common Stock (100%), have agreed to vote their
respective shares of Common Stock in accordance with the vote of the majority of
all voting non-affiliated stockholders of Post-Sale Seal with respect to the
initial significant Business Combination.
FUNDING OF THE BUSINESS PLAN
In view of the limited tangible net worth of Post-Sale Seal following the
sale of the marine assets, an additional equity infusion will be made by Magnum,
and consideration will be given to additional private equity or debt placement
to achieve a successful Business Combination.
a) Share Purchase
In addition to 37,600 shares of Class A Stock purchased from Hvide, Magnum
proposes to make an equity investment of $100,000 in Post-Sale Seal to purchase
277,778 treasury shares of Class A Stock, at a price of $.36 per share, which is
the average price per share between bid and asked prices for the Class A Stock,
as reported on the National Daily Quotation Service (``Pink Sheets'') during the
60-day period of February 1 through March 29, 1996, which immediately preceded
the announcement of the Agreement for the sale of marine assets. This
investment is subject to the approval of the Board of Directors of Post-Sale
Seal.
b) Private Equity or Debt Placement
Post-Sale Seal intends to offer a private equity or debt placement to
individual, corporate, or institutional investors to fund its merger and
acquisition activities as well as to fund working capital for general corporate
purposes that might be required to effectuate the business plan.
c) Financing the Business Combination
Post-Sale Seal will use cash, equity, debt or a combination of these to
achieve a Business Combination.
Post-Sale Seal may borrow funds to increase the amount of capital available
for a Business Combination or otherwise finance the operations of the Acquired
Business. The amount and nature of any borrowings by
26
<PAGE>
Post-Sale Seal will depend on numerous considerations including its capital
requirements, its perceived ability to service such debt and prevailing
conditions in the financial markets and the general economy.
Post-Sale Seal may lend up to all of any financing proceeds to an Acquired
Business if required for such concern's operating needs at any time subsequent
to Post-Sale Seal's definitive agreement respecting a Business Combination with
such Acquired Business but prior to receipt of Post-Sale Seal stockholders'
approval thereof. Any such loan will be made at an interest rate no less than
that which in its view would be charged the Acquired Business by a non-
affiliated lender, and will be appropriately collateralized.
POST-CLOSING BOARD OF DIRECTORS
The experience and commitment of Post-Sale Seal's Board of Directors will be
fundamental strengths. It is anticipated that Post-Sale Seal will have a five
member Board of Directors consisting of two Class A Directors and three Class B
Directors. One Class A Director's position and one Class B Director's position
will be vacant pending appointment by the Board in due course. See ``Change of
Directors/Management''.
SHAREHOLDERS
Following the acquisition from Hvide of Seal Fleet shares by Magnum, and the
purchase of the treasury shares by Magnum as heretofore described, Post-Sale
Seal will have two new shareholders holding in excess of 5% of its Class A
Stock, and one new shareholder owning all of its Class B Stock. Upon such
occurrence there will be 2,262,405 shares of Class A Stock issued and
outstanding, and 50,000 shares of Class B Stock issued and outstanding.
a) HVIDE MARINE INCORPORATED
2200 Eller Drive
Fort Lauderdale, FL 33316
Hvide will own 175,055 shares, or 7.7%, of the Class A Stock. Hvide is a
diversified marine transportation services company serving the energy and
chemical industries in the US domestic trade. Since 1993, Hvide has grown from
27 to 91 vessels and had 1995 revenues of over $71 million. Hvide is a
significant operator in several niche markets, including offshore energy
services and specialty chemical transportation. Hvide has one of the largest
and newest fleets of offshore drilling and production support vessels in the US
Gulf of Mexico and operates approximately half of the ocean transportation
capacity carrying specialty industrial chemicals in the domestic trade. Its
tugs are the exclusive provider of docking services in Port Everglades and Port
Canaveral, and also work in Mobile, Alabama. In late 1994, Hvide acquired a
fleet of fuel barges and towboats which service northeast Florida. J. Erik
Hvide, Chairman, President and Chief Executive Officer of Hvide Maine
Incorporated will be a Class A Director of Post-Sale Seal.
b) FIRST MAHNUM CORPORATION
125 Worth Avenue, Suite 318
Palm Beach, FL 33480
Magnum will own 315,378 (13.9%) of the Class A Stock and 50,000 shares (100%
of the Class B Stock). Magnum is an entity totally owned and controlled by
Thomas M. Ferguson.
27
<PAGE>
RISK FACTORS
IF THE SALE IS CONSUMMATED, POST-SALE SEAL WILL BECOME AN ACQUISITION
COMPANY. THE STOCKHOLDERS OF THE COMPANY WILL NOT GET TO VOTE SEPARATELY ON
WHETHER TO CHANGE THE NATURE OF POST-SALE SEAL'S BUSINESS TO AN ACQUISITION
COMPANY. CONSEQUENTLY, THE FOLLOWING RISK FACTORS SHOULD BE TAKEN INTO
CONSIDERATION BY EACH STOCKHOLDER IN DETERMINING WHETHER TO APPROVE THE SALE.
CHANGE OF CONTROL. As part of the consummation of the Sale, all of the
current Board of Directors will resign after appointing their successors who are
named herein, all without Stockholder approval. The current officers will also
resign and be replaced by the persons named in this Proxy Statement. The
consummation of a business combination may also involve a change in officers and
directors of Post-Sale Seal.
NO OPERATING HISTORY. The Company will change the nature of its business if
the Sale is approved and consummated. Post-Sale Seal has no operating history
in its new line of business, which is yet to be determined. There can be no
assurance that Post-Sale Seal's activities will be profitable. As of the date
of this Proxy Statement, the Company has not entered into any arrangement to
participate in any business ventures or purchase any products.
LIMITED ASSETS AND NEGATIVE NET WORTH. The Company's only assets after the
Sale will be its accounts receivable, cash and minor furniture, equipment, the
travel agency and some real estate and it will have a negative net worth on a
pro forma basis (at March 31, 1996, see ``Pro Forma Financial Information'').
Any business activity that Post-Sale Seal eventually undertakes may require
substantial capital, which may be difficult to obtain or not available in light
of the Company's pro forma financial condition. The success of Post-Sale Seal
will depend upon its ability to acquire additional capital. Since the Company
does not know the type of business in which it will eventually engage, the
Company does not know what its ultimate capital needs will be.
LACK OF LIQUIDITY. Immediately following the closing of the Sale, the
Company will have only its travel agency business to generate income. The
Company does not anticipate that the travel agency business will be able to
generate sufficient income to meet the Company's debt service and, in any event,
the travel agency business may be sold or otherwise discontinued. The Company's
ongoing ability to meet its debt service obligations will be dependent on its
ability to successfully complete a business combination with an entity with
sufficient cash flow to meet the Company's obligations. Without such an
acquisition, the Company will not be able to meet its debt service obligations
to the Trusts, and the Trusts will look to the Hvide guaranty for payment.
However, if Hvide is required to make payments to the Trusts pursuant to its
guaranty, the Company is obligated to reimburse Hvide for such payments.
SPECULATIVE NATURE OF COMPANY'S PROPOSED OPERATIONS. The success of Post-
Sale Seal will depend to a great extent on the operations, financial condition
and management of the company or companies with which Post-Sale Seal may merge
or which it may acquire. While Magnum intends to cause Post-Sale Seal to merge
into or acquire one or more privately held entities with established operating
histories, there can be no assurance that Post-Sale Seal will be successful in
locating an acquisition candidate meeting such criteria. In the event Post-Sale
Seal completes a merger or acquisition transaction, the success of its
operations will be dependent upon management of the successor firm and numerous
other factors beyond Post-Sale Seal's control. Post-Sale Seal anticipates that
it will seek to acquire an existing business. After the acquisition has taken
place, management from the acquired entity may operate Post-Sale Seal. There
is, however, a possibility that Post-Sale Seal may seek to operate an ongoing
business, in which case Post-Sale Seal's management might be retained.
28
<PAGE>
DILUTION IN MERGER OR ACQUISTIION TRANSACTION. The Company's business plan
is based upon a merger with or acquisition of a private concern, which could
result in Post-Sale Seal issuing securities to stockholders of any such target
concern. The issuance of previously authorized and unissued Common Stock of
Post-Sale Seal or the creation and issuance of preferred stock would result in
substantial dilution to present Stockholders of the Company, which may result in
another change in control or management of Post-Sale Seal.
DEPENDENCE ON INEXPERIENCED MANAGEMENT. The success of Post-Sale Seal will
largely be dependent upon the active participation of Ferguson. Ferguson may
not have any experience or background in the business in which Post-Sale Seal
proposes to engage and, accordingly, management will probably be required to
obtain independent outside professionals to effectively evaluate and appraise a
potential business combination. Each of the post-Sale officers and directors
has other full time employment and will be available to participate in
management decisions only on a part time or as needed basis. It is expected
that post-Sale management will each devote approximately one-third of their time
to the business affairs of Post-Sale Seal. Officers and directors may be
compensated prior to any merger or acquisition. Once Post-Sale Seal acquires a
business opportunity, the post-Sale management may resign. The amount of time
the post-Sale officers and directors devote to Post-Sale Seal matters will
increase if Post-Sale Seal operates an active business. The time which the
post-Sale officers and directors devote to the business affairs of Post-Sale
Seal and the skill with which they discharge their responsibilities, will
substantially affect Post-Sale Seal's success.
EFFECT OF LIMITED TIME DEVOTED TO POST-SALE SEAL. Opportunities available to
Post-Sale Seal for mergers or acquisitions may be lost or delayed as a result of
the limited amount of time devoted to Post-Sale Seal by post-Sale management.
As a result, an acquisition or merger may never take place.
NO BUSINESS PLAN. The Company has not identified the business opportunities
in which it will attempt to obtain an interest. The Company therefore cannot
describe the specific risks presented by such business. Such business may
involve an unproven product, technology or marketing strategy, the ultimate
success of which cannot be assured. The acquired business opportunity may be in
competition with larger, more established firms over which it will have no
competitive advantage. The specific risks of a business opportunity will be
disclosed to Post-Sale Seal's Stockholders prior to its acquisition, and
approval therefor will be obtained. Post-Sale Seal's investment in a business
opportunity may be highly illiquid and could result in a total loss to Post-Sale
Seal if the opportunity is unsuccessful.
CONFLICTS OF INTEREST. All of the directors and officers of the Company
following the Sale will be associated with other firms or occupations involving
other business activities. Because of these affiliations and because these
individuals will devote only part time to the affairs of Post-Sale Seal, there
are potential inherent conflicts of interest in their acting as directors and
officers of Post-Sale Seal and of other entities. All of the Company's post-
Sale directors and officers may be directors or controlling stockholders of
other entities engaged in a variety of businesses which may in the future have
various transactions with Post-Sale Seal. Additional conflicts of interest and
non-arm's length transactions may also arise in the future in the event the
Company's post-Sale officers or directors are involved in the management of any
firms with which Post-Sale Seal transacts business. Post-Sale Seal may pay
finder's fees or other fees to its post-Sale officers, directors or affiliates
in connection with any potential business combination involving Post-Sale Seal.
DEPENDENCE ON OUTSIDE ADVISORS. In order to supplement the business
experience of post-Sale management, Post-Sale Seal may employ accountants,
technical experts, appraisers, attorneys or other consultants or advisors. The
selection of any such advisors will be made by post-Sale management and without
any control from Stockholders. Additionally, it is anticipated that such
persons may be engaged by Post-Sale Seal on an independent basis without a
continuing fiduciary or other obligation to Post-Sale Seal.
29
<PAGE>
NO DIVIDENDS ANTICIPATED. At the present time Magnum does not anticipate
that Post-Sale Seal will pay dividends, cash or otherwise, on its Common Stock
in the foreseeable future. Future dividends will depend on earnings, if any, of
Post-Sale Seal, its financial requirements and other factors.
SCARCITY OF AND COMPETITION FOR MERGER OR ACQUISITION PROSPECTS. Post-Sale
Seal will be an insignificant participant in the business of seeking mergers
with and acquisitions of small private entities. In addition, Post-Sale Seal
will have very limited assets to support an acquisition. A large number of
established and well financed entities, including venture capital firms, are
active in mergers and acquisitions of private companies which may be desirable
target candidates for Post-Sale Seal. Nearly all such entities have
significantly greater financial resources, technical expertise and managerial
capabilities than Post-Sale Seal, and consequently, Post-Sale Seal will be at a
competitive disadvantage in identifying possible merger or acquisition
candidates.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION. The Company has
no arrangement, agreement or understanding with respect to a merger with, or
acquisition of, any entity, private or public. There can be no assurance Post-
Sale Seal will be successful in identifying and evaluating suitable merger or
acquisition candidates or in concluding a merger or acquisition transaction on
terms favorable to the Company.
LACK OF MARKET RESEARCH. Magnum has neither conducted nor has it engaged
other entities to conduct market research to determine that demand exists for
the transactions contemplated by Post-Sale Seal or for the business activity in
which a potential acquisition candidate engages. Even in the event demand is
identified for the business of an acquisition candidate, there is no assurance
Post-Sale Seal will be successful in completing any such transaction.
CONTROL BY SINGLE STOCKHOLDER. Upon the completion of the Sale and sale of
their shares by the Trusts, Magnum will own all of the Class B Stock and will be
able to select a majority of the Board of Directors of Post-Sale Seal and thus
control the direction of Post-Sale Seal.
POSSIBLE LACK OF DIVERSIFICATION. Post-Sale Seal may be unable to diversify
its business activities and, as a consequence, may suffer a total loss to Post-
Sale Seal and the Stockholders should an acquisition by Post-Sale Seal prove to
be unprofitable. Post-Sale Seal's failure or inability to diversify its
activities into a number of areas may subject Post-Sale Seal to economic
fluctuations within a particular business or industry and, therefore, increase
the risks associated with Post-Sale Seal's operations.
ADDITIONAL FINANCING REQUIRED. The funds available to Post-Sale Seal will
probably not be adequate for it to acquire an interest in any property,
business, or opportunity which Post-Sale Seal would choose. Without raising
additional funds, Post-Sale Seal may not have sufficient capital to fully
exploit any property, business or opportunity acquired. Accordingly, the
ultimate success of Post-Sale Seal may depend upon its ability to raise
additional capital or to have other parties bear a portion of the required costs
to further develop or exploit any business venture in which Post-Sale Seal
becomes involved. There is no assurance that funds will be available from any
source, and if not available, it will be necessary for Post-Sale Seal to limit
its operations to those that can be financed from the existing assets.
ISSUANCE OF ADDITIONAL SHARES. Approximately 1,715,000 shares of Class A
Stock or 46.4% of the total authorized shares (3,700,000) of Class A Stock of
the Company are available for sale. The Board of Directors has the power to
issue such shares. Magnum has offered to purchase 277,778 shares (12.3%) of
Class A Stock for $100,000, which will reduce the percentage ownership of the
Class A Stockholders immediately. Post-Sale Seal may issue shares of Common
Stock to raise additional capital or to effect a merger or acquisition with a
target corporation. Stockholders do not have preemptive rights with respect to
the issuance of shares of the
30
<PAGE>
Company's Common Stock. Any additional issuance by Post-Sale Seal from its
authorized but unissued shares would have the effect of further reducing the
percentage ownership of the Stockholders.
REGULATION. Although Post-Sale Seal will be subject to regulation under the
Securities Act of 1933 and the Securities Exchange Act of 1934, Magnum believes
Post-Sale Seal will not be subject to regulation under the Investment Company
Act of 1940 insofar as Post-Sale Seal will not be engaged in the business of
investing or trading in securities. In the event Post-Sale Seal engages in
business combinations which result in Post-Sale Seal holding passive investment
interests in a number of entities, Post-Sale Seal could be subject to regulation
under the Investment Company Act of 1940. In such event, Post-Sale Seal would
be required to register as an investment company and could be expected to incur
significant registration and compliance costs. Magnum has obtained no formal
determination from the Securities and Exchange Commission as to the status of
Post-Sale Seal under the Investment Company Act of 1940, and consequently, any
violation of such Act would subject Post-Sale Seal to material adverse
consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. Mergers or acquisitions involving
the issuance of the Post-Sale Seal's Common Stock may result in stockholders of
a target company obtaining a controlling interest in Post-Sale Seal. The
resulting change in control of Post-Sale Seal could result in removal of the
post-Sale officers and directors and a corresponding reduction in their
participation in the future affairs of Post-Sale Seal. It is impossible to
predict the extent to which management selected by Magnum will participate in
the future affairs of Post-Sale Seal following a merger or acquisition.
31
<PAGE>
PROPOSAL II
ELECTION OF DIRECTORS
The authorized number of directors of the Company is not less than five. At
this time, the Board of Directors has set the number of directors at seven.
Each director will hold office until the next meeting of Stockholders for the
election of directors and until his successor is elected and qualifies, unless
he sooner resigns or is removed as provided in the bylaws. If the Sale is
consummated, the directors elected by the Stockholders will be replaced. See
``The Sale of Assets - Business of Seal Fleet Following the Sale''. The holders
of Class B Stock are entitled to nominate and elect a simple majority of the
Board of Directors (four members) (``Class B Directors''), and the holders of
Class A Stock are entitled to nominate and elect the remainder of the Board of
Directors (three members) (``Class A Directors'').
The persons named as Proxies in the enclosed Proxy have been designated by
management and intend to vote the shares of Class A Stock represented by each
Proxy for the nomination and election to the Board of Directors of those persons
named below as nominees for Class A Directors, unless authority to vote for any
such nominee is withheld on such Proxy.
The Trusts have informed the Company that the outstanding shares of Class B
Stock will be voted, directly or by Proxy, for the persons named below as
nominees for Class B Directors.
Although management has no reason to believe that any of the Class A Director
nominees will be unable or unwilling to serve, if any such nominee withdraws or
otherwise becomes unavailable to serve, the persons named as Proxies will vote
for any substitute nominee designated by the Board of Directors. Certain
information concerning the nominees is provided below.
NOMINEES FOR CLASS A DIRECTORS
JOHN W. BISSELL Director since 1981
League City, Texas Age 67
Mr. Bissell, for the past five years, has been Chairman of the Board of Seal
Fleet, Inc. He has served as director, President and Chief Executive Officer of
the Company since 1981, and before then, he served in other executive and
management positions with the Company since 1975. Mr. Bissell also serves as a
member of the Executive Committee of the Company.
___________________________
HAROLD C. MACDONALD Director since 1981
Houston, Texas Age 62
Mr. MacDonald, for the past thirty-three years, has been Comptroller of The
Moody Foundation, a charitable foundation based in Galveston, Texas. Mr.
MacDonald has served as director of the Company since 1981. He is a member of
the Executive Committee and Audit Committee of the Company.
___________________________
32
<PAGE>
GERALD J. SMITH Director since 1980
Galveston, Texas Age 61
Mr. Smith, for the past seventeen years, has been Program Officer of The Moody
Foundation, a charitable foundation based in Galveston, Texas. Mr. Smith has
served as director of the Company since 1980. He is a member of the Audit
Committee of the Company.
NOMINEES FOR CLASS B DIRECTORS
ANN MCLEOD MOODY Director since 1975
Galveston, Texas Age 58
Mrs. Moody has served as Corporate Secretary and director of the Company since
1975. Mrs. Moody is a member of the Executive Committee of the Company.
_________________________
ROBERT L. MOODY, JR. Director since 1980
Galveston, Texas Age 36
Mr. Moody, Jr., for the past seven years, has been President of Moody Insurance
Group. He has served as director of the Company since 1980. Mr. Moody is a
member of the Audit Committee of the Company.
_________________________
RUSSELL S. MOODY Director since 1982
Austin, Texas Age 34
Russell S. Moody has served as director of the Company since 1982. He also
serves as director of American National Insurance Company.
_________________________
LOUIS E. PAULS, JR. Director since 1970
Galveston, Texas Age 60
Mr. Pauls, for the past eleven years, has been President of Louis Pauls &
Company, an investment brokers firm based in Galveston. Mr. Pauls has served as
director of the Company since 1970. He also serves as director of National
Western Life Insurance Company. Mr. Pauls is a member of the Audit Committee of
the Company.
_________________________
Ann McLeod Moody is the wife, and Robert L. Moody, Jr. and Russell S. Moody
are the sons, of Robert L. Moody, settlor of the Trusts. There is no other
relationship by birth or marriage among the directors or executive officers.
33
<PAGE>
Robert L. Moody is an officer and director of National Western Life Insurance
Company, American National Insurance Company and Moody National Bank, and he and
his son, Ross Moody, and his mother are the three trustees of The Moody
Foundation.
Russell S. Moody suffered a serious automobile accident in 1980, which
resulted in his confinement to a hospital for more than a year. After the
accident, his father, Robert L. Moody was appointed his guardian for limited
purposes. This limited guardianship is still in effect.
To the best knowledge of the Company, no other director of the Company is a
director of any other company with a class of securities registered under
Section 12 of the Securities Exchange Act of 1934 or subject to the requirements
of Section 15(d) of that Act or any company registered under the Investment
Company Act of 1940.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held five meetings during 1995. All
directors attended at least 75% of the aggregate number of meetings of the Board
of Directors, except Russell S. Moody. Russell Moody did not attend any
meetings during 1995. The Board of Directors has two standing committees. The
Executive Committee, which consists of Mrs. Moody and Messrs. Bissell and
MacDonald, did not meet during 1995. The Executive Committee is empowered to
exercise, in the intervals between the meetings of the Board of Directors, the
powers of the Board in the management of the business and affairs of the
Company.
The Audit Committee, which consists of Messrs. Pauls, MacDonald, Smith and
Moody, Jr., did not meet during 1995. The Audit Committee is empowered to
recommend to the Board of Directors a firm of certified public accountants to
conduct audits of the accounts and affairs of the Company, to review accounting
objectives and procedures of the Company and the findings and reports of the
independent certified public accountants, and to make such reports and
recommendations to the Board of Directors as it deems appropriate.
The Board of Directors has no nominating or compensation committee.
COMPENSATION OF DIRECTORS
Directors are compensated at the rate of $353 for regular meetings and $177
for each special meeting which they attend and are also reimbursed for expenses.
34
<PAGE>
INFORMATION ABOUT EXECUTIVE OFFICERS
EXECUTIVE OFFICERS
The following table sets forth certain information with respect to Seal
Fleet's present executive officers. All executive officers are elected to terms
which expire at the first meeting of the Board of Directors which next follows
the Annual Meeting of Stockholders.
<TABLE>
<CAPTION>
YEARS OF OFFICER
NAME POSITION AGE SERVICE SINCE
- ------------------ ---------------- --- -------- -------
<S> <C> <C> <C> <C>
John W. Bissell Chairman, 67 21 1975
President
and CEO
Carl H. Haglund Executive 52 25 1991
Vice
President
Trinidad Salinas Vice President, 55 19 1981
Treasurer
and Assistant
Secretary
Ralph McIngvale Vice President, 39 4 1992
Sales, Sealcraft
Operators, Inc.
Ann McLeod Moody Secretary 58 21 1975
</TABLE>
All of the above executive officers have been employed by Seal Fleet in
management positions for more than five years. Carl Haglund has been employed
with the Company in management positions since 1971.
Mr. Bissell, Ms. Salinas, Mr. McIngvale and Mr. Haglund devote their full
working time to the Company. Information as to the Company's arrangements with
Ann McLeod Moody is provided under ``Certain Transactions''.
Mr. McIngvale has been Vice President, Sales, of Sealcraft Operators, Inc., a
subsidiary of the Company, since March, 1992. Prior thereto, he was Vice
President, Sales, of Kilgore Offshore, Inc., which owns, operates and brokers
supply vessels.
35
<PAGE>
SUMMARY COMPENSATION TABLE
The following table provides information as to the compensation paid by the
Company and its subsidiaries, during fiscal year 1995, to the chief executive
officer and each of the other executive officers whose remuneration exceeded
$100,000 in 1995.
<TABLE>
<CAPTION>
- --------------------------------------------------------------
NAME AND OTHER
PRINCIPAL ANNUAL
POSITION YEAR SALARY COMPENSATION/1/
<S> <C> <C> <C>
- --------------------------------------------------------------
John W. Bissell, Chairman 1995 $ 96,000 $10,000
President and CEO 1994 $ 88,000 $10,000
1993 $ 80,000 $12,000
Ralph McIngvale/(2)/ 1995 $542,000 -0-
Vice President, Sales 1994 $717,000 -0-
1993 $771,000 -0-
</TABLE>
________________
(1) The Company does not provide any long-term compensation plan, stock options,
stock appreciation rights, long-term incentive plan, defined benefit or
actuarial plan, employment contract or termination of employment or change
control agreements with any executive officer other then Mr. McIngvale. The
Company sponsors a 401(k) Plan for all employees but makes no contributions
thereto. Mr. Bissell received director's fees of $1,765 in 1995, 1994 and
1993, which are included in his salary. The Other Annual Compensation for
Mr. Bissell represents the cost and operating expense of an automobile which
totaled to $10,000, $10,000, and $12,000 in 1995, 1994 and 1993,
respectively.
(2) The Company entered into a renewal employment agreement with Mr. McIngvale
on January 1, 1996. This agreement provides for a minimum salary of $3,500
per month plus certain commission, provided that the total salary plus
commissions may not be less than $100,000 per annum. This agreement is
cancelable upon 30 days notice by either party.
The Company has no obligation to make any payments to any officer or
employee who will or may be terminated if the Sale is consummated. However, the
Company has agreed with Mr. McIngvale to transfer the boat brokerage business to
him if the Sale is consummated. Mr. McIngvale will be responsible for collecting
all of the accounts receivable, paying the payables and paying 50% of the
difference to the Company. See ``The Sale of Assets - General''.
36
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS OF
SEAL FLEET, MANAGEMENT AND NOMINEES FOR DIRECTORS
<TABLE>
<CAPTION>
Amount and
Title Nature of Percent
of Name and Address Beneficial of
Class of Beneficial Owner/(1)/ Ownership/(2)/ Class
- ---------------- --------------------------------------- -------------- --------
<S> <C> <C> <C>
A Stock Walter Carucci 126,417 6.4%
33 Lighthouse Road
Great Neck, New York 11024
A Stock Three R Trusts/(3)/ 212,655 10.72%
One Moody Plaza
Galveston, Texas 77550
B Stock Three R Trusts/(3)/ 50,000 100%
A Stock John W. Bissell 16,250 *
A Stock Ann McLeod Moody 0 *
A Stock Trinidad C. Salinas 6,775 *
A Stock Carl H. Haglund 11,960 *
A Stock Louis E. Pauls, Jr. 7,000 *
A Stock Gerald J. Smith 205 *
A Stock Harold C. MacDonald 100 *
A Stock Robert L. Moody, Jr./(3)(4)/ *
A Stock Russell S. Moody/(3)(4)/ *
A Stock All officers and current directors as 52,290 2.67%
a group (10 persons)/(4)/
* less than 1%
</TABLE>
____________________
(1) Address of officers and directors is P. O. Box 1168, Galveston, Texas
77553.
(2) The Company has been advised that each of its officers and directors (except
as stated in note (3)) has sole power to vote and to make investment
decisions regarding the shares beneficially owned by him or her.
(3) Robert L. Moody established four Trusts (collectively, the ``Three R
Trusts'' or ``Trusts'') one for each of his children Robert L. Moody, Jr.,
Russell S. Moody, Ross R. Moody and Frances Anne Moody. Each of the Three R
Trusts owns an equal number of shares of Class A Stock and Class B Stock.
The trustee of each Three R Trust is Irwin M. Herz, Jr. The Company has
been advised that the trustee has sole power to vote and to make investment
decisions regarding all the shares owned by the Three R Trusts. The
beneficiaries cannot direct the sale of the shares or the vote thereof.
(4) Does not include shares owned by the Three R Trusts.
If the Sale is approved and consummated, control of the Company will change.
See ``The Sale of Assets - Business of Seal Fleet Following the Sale''.
37
<PAGE>
CERTAIN TRANSACTIONS
The following paragraphs describe certain transactions or relationships
between the Company and its officers, directors and certain related parties
which occurred or have continued since January 1, 1995.
A subsidiary of the Company has a management consulting agreement with Robert
L. Moody. Under such agreement annual fees of $50,000 and $33,000 were paid in
1995 and 1994, respectively. The agreement also provides that the Company will
indemnify Mr. Moody against liabilities incurred by him under such agreement.
Ann McLeod Moody (Robert L. Moody's wife) is corporate Secretary of the
Company and is paid an annual salary of $16,000. Her duties as Secretary
require only a minor portion of her time. Mrs. Moody is also a director of the
Company and in such capacity receives the same fees as other directors.
Irwin M. Herz, Jr., trustee of the Trusts, is a member of the law firm which
serves as the Company's general legal counsel. The Company, however, did engage
another law firm to represent it as special counsel in the Sale. Mr. Herz's
firm provided legal services for which it accrued and received approximately
$1,000 during 1995 and will receive approximately $2,000 for legal services in
connection with the proposed Sale. Such services are limited to preparation of
appropriate documentation to transfer title to the Vessels. Such amount will be
due whether the Sale is consummated or not, since the services will in any event
be rendered.
The Company's offices occupy a steel and masonry building on 29,000 square
foot tract of land owned by a partnership of which Robert L. Moody is a partner.
The Company's lease expires in 1996, provides for a minimum monthly rental of
$1,655 ($20,000 per year, which is the amount paid in 1995) and gives the
Company the option to extend the lease for four additional five-year periods at
lower rental rates. The Company pays all repair costs, insurance and taxes.
The Company believes that the terms of this lease are as favorable as those
which it could reasonably expect to obtain from an unaffiliated party.
The Company manages and operates various ships beneficially owned by the
Trusts. The Company earns fees based on 6% of the ships' revenues. Fees earned
on the Trusts' ships totaled $325,000 and $249,000 during 1995 and 1994,
respectively. On behalf of the related parties, the Company collects revenues
and pays expenses for the management of these ships. This activity resulted in
a receivable from the Trusts of $703,000 at March 31, 1996. See discussion
under ``The Sale of Assets'' for application of proceeds of sale.
The Company has notes payable to the Trusts in the face amount of $5,925,000,
with interest at 7%, collateralized by the Common Stock of six subsidiaries of
the Company. Principal payments were due in two equal installments on December
27, 1990 and 1991. The Company was unable to make these principal payments to
the Trusts, putting the Company in default. In 1993, the Company made a
principal payment of $100,000. The Trusts have not called the notes and orally
have granted an indefinite extension. The entire balance is classified as
current at December 31, 1995 and 1994. During each of the years 1986 through
1989, the Company paid one-half the interest due to the Trusts during the year
and gave a promissory note for the remainder totalling $208,000 per year. The
total principal of these notes is $830,000 (the ``Interest Notes''), and they
were due on December 27, 1991. No interest has been paid on the Interest Notes.
Interest expense on all these notes was $498,000 in each of 1995 and 1994. See
the discussion under ``The Sale of Assets'' for application of proceeds of the
Sale with respect to this debt.
In March, 1996, the Company acknowledged its obligations under the $5,925,000
and the Interest Notes. The Trusts have agreed to forgive $500,000 of interest
due on the Interest Notes if the Sale is consummated. In connection with the
Sale, assuming a July 31, 1996 closing, the Company will pay to the Trusts
$3,876,000, and rearrange the remaining balance of $3,000,000 into a new term
note. The new note will bear interest at 10% per annum, with principal payable
monthly based upon a 60-month amortization schedule for a 36-month period, with
any remaining principal and interest due on the 37th month. Such new note will
be guaranteed
38
<PAGE>
by Hvide. If the Sale is not consummated, the notes remain in force and past-
due. The Trusts have agreed to indemnify the officers and directors of the
Company with respect to acknowledgment of the Interest Notes.
During 1995, $1,900,000 of the Company's $2,500,000 in gross sales generated
by its travel agency business was generated by sales to companies that may be
deemed to be affiliates of Robert L. Moody.
SECTION 16 FILINGS DISCLOSURE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission (``SEC'') initial reports of ownership and reports of
changes in ownership of Class A Stock. Officers, directors and greater than
ten-percent stockholders are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the Company's copies of
such reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1995, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten-percent beneficial owners were complied with except that Ralph
McIngvale failed to timely file his initial Form 3 and one subsequent Form 4.
PROPOSAL III
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company, upon the recommendation of the Audit
Committee, has appointed the firm of Pannell Kerr Forster of Texas, P.C. to
serve as independent auditors of the Company for the fiscal year ending December
31, 1996, subject to ratification of this appointment by the Stockholders of the
Company. Management is not aware of direct or indirect financial interest or
any other connections Pannell Kerr Forster of Texas, P.C. may have with the
Company or its subsidiaries except the usual professional status of an
independent auditor.
Ratification of the appointment of the independent auditors requires the
affirmative vote of a majority of the shares of Common Stock of the Company
voting in person or by Proxy at the Annual Meeting of Stockholders. If the
stockholders should not ratify the appointment of Pannell Kerr Forster of Texas,
P.C., the Board of Directors will reconsider the appointment.
One or more representatives of the auditing firm of Pannell Kerr Forster of
Texas, P.C. will be present at this year's Annual Meeting of Stockholders. They
will have an opportunity to make a statement and will be available to respond to
appropriate questions.
THE TRANSACTION OF OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors has no
knowledge of any other business which will be presented for consideration at the
meeting. If any other business properly comes before the meeting, it is the
intention of the persons named in the enclosed Proxy card to vote the shares
they represent as the Board of Directors of the Company may recommend.
39
<PAGE>
PROPOSALS BY STOCKHOLDERS
Stockholders who wish to present proposals at the 1997 annual meeting of
stockholders and to have proposals described in the Company's proxy materials
must submit their proposals to the Company not later than March 15, 1997.
INCORPORATION BY REFERENCE
The description of the Company's Business and Properties, pages 4 though 7,
the Company's Financial Statements, pages 10 through 23, Legal Proceedings, page
7, Market for the Company's Common Stock and Related Stockholder Matters, pages
7 and 8, Management's Discussion and Analysis of Financial Condition and Results
of Operations, pages 8 and 9, and Changes in and Disagreements with Accountants
on Accounting and Financial Disclosures, page 23, are incorporated by reference
from the Company's Annual Report to Stockholders for the year ended December 31,
1995.
By order of the Board of Directors,
John W. Bissell, Chairman
Date: June __, 1996
THE COMPANY WILL FURNISH WITHOUT CHARGE TO ANY PERSON WHOSE PROXY IS SOLICITED,
ON WRITTEN REQUEST FROM SUCH PERSON DELIVERED TO TRINIDAD SALINAS, 3305 AVENUE
S, GALVESTON, TEXAS 77550, A COPY OF THE COMPANY'S ANNUAL REPORT TO THE
SECURITIES AND EXCHANGE COMMISSION ON FORM 10-KSB FOR 1995.
40
<PAGE>
SEAL FLEET, INC.
INDEX TO FINANCIAL STATEMENTS
Page
<TABLE>
<CAPTION>
<S> <C>
Condensed Consolidated Balance Sheets..................... F-2
Condensed Consolidated Statements of Operations........... F-3
Condensed Consolidated Statements of Cash Flows........... F-4
Notes to Condensed Consolidated Financial Statements...... F-5
</TABLE>
F-1
<PAGE>
SEAL FLEET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
March 31 December 31
1996 1995
<S> <C> <C>
ASSETS
- ------
Current Assets
Cash $ 1,503 $ 1,055
Accounts receivable - trade 4,876 4,694
Accounts receivable - related party 703 758
Accounts receivable - other 145 133
Deferred drydocking costs 700 294
Materials and supplies 65 66
Other current assets 97 112
------- -------
Total current assets 8,089 7,112
------- -------
Property and Equipment
Ships 9,922 9,922
Furniture and equipment 210 223
Leasehold improvements 123 124
------- -------
Total property and equipment 10,255 10,269
Less accumulated depreciation 7,633 7,533
------- -------
Property and equipment - net 2,622 2,736
Other Assets
Deferred drydocking costs - non current 356 356
Assets held for resale 154 154
Other assets 36 36
------- -------
TOTAL ASSETS $11,257 $10,394
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current Liabilities
Current portion of long-term debt to related party $ 7,460 $ 7,560
Accounts payable - trade 4,560 3,815
Accrued interest expense 991 877
Other liabilities 100
-------
Total current liabilities 13,111 12,252
Long-term debt to related party less current portion 1,666 1,763
------- -------
Total liabilities 14,777 14,015
Shareholders' Equity
Class A common stock, $.10 par value;
3,700,000 shares authorized and
2,432,248 shares issued in 1996 and 1995 243 243
Class B common stock, $.10 par value; 50,000
shares authorized, issued and outstanding 5 5
Additional paid-in capital 4,456 4,456
Retained deficit (8,094) (8,195)
Class A common stock held in treasury
at cost; 447,621 shares in 1996 and 1995 (130) (130)
------- -------
Shareholders' equity (3,520) (3,621)
------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY $11,257 $10,394
======= =======
</TABLE>
See notes to condensed consolidated financial statements.
F-2
<PAGE>
SEAL FLEET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended
March 31,
1996 1995
<S> <C> <C>
Charter revenue $1,622 $1,432
Operating fees 91 75
Crewing fees 12
Travel agency commissions 58 44
------ ------
Total revenues 1,771 1,563
Operating expenses 652 755
Drydock amortization 136 65
Selling, general and administrative expense 533 480
Selling, general and administrative expense-travel agency 56 70
Depreciation 117 136
Interest expense 188 205
Other (income) and expense (12) 11
Total costs and expenses 1,670 1,722
------ ------
Net income (loss) $ 101 $ (159)
====== ======
Net income (loss) per share $.05 $ (.08)
==== =====
Weighted average shares outstanding 2,035,000 2,035,000
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
F-3
<PAGE>
SEAL FLEET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended
March 31,
1996 1995
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 101 $ (159)
Adjustments to reconcile net loss to net cash
provided (required) by operating activities:
Depreciation 117 136
Changes in operating assets and liabilities:
Accounts and notes receivable (138) 1,774
Other current assets (390) 51
Accounts payable - trade 744 (1,467)
Interest payable 114 132
------ ------
Net cash provided (required) by operating activities 548 467
------ ------
INVESTING ACTIVITIES
Purchase of property and equipment (3) (14)
-- ---
Net cash required by investing activities (3) (14)
-- ---
FINANCING ACTIVITIES
Decrease in long term debt (97) (89)
----- -----
Net cash required by financing activities (97) (89)
----- -----
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 448 364
CASH AND CASH EQUIVALENTS AT
JANUARY 1, 1996 AND 1995 1,055 561
----- -----
CASH AND CASH EQUIVALENTS AT
MARCH 31, 1996 AND 1995 1,503 $ $925
===== =====
</TABLE>
See notes to condensed consolidated financial statements.
F-4
<PAGE>
SEAL FLEET, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note A -- Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
on a going concern basis which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business.
During the three month period ended March 31, 1996, Seal Fleet, Inc. ("Seal
Fleet" or "the Company") realized net income of $101,000 and as of that date the
Company's total liabilities exceeded its total assets by $3,520,000. Further
the Company is currently in default on a significant portion of notes to a
related party (see Note C). These factors indicate that the Company may be
unable to continue in its present form as a going concern.
Note B -- Results of Operations
The results of operation for the three month period ended March 31, 1996 is not
necessarily indicative of the results of operation for the full year.
Note C -- Default in Senior Securities
The Company has a note payable to the Three R Trusts, face amount of $5,925,000,
stated interest at 7%, collateralized by the common stock of six subsidiaries of
the Company. Principal payments were due in two equal installments on December
27, 1990 and 1991. The Company was unable to make these principal payments to
the Three R Trusts, putting the note in default. However, the Trusts have not
called the note and have granted an indefinite verbal extension. The Company
made a principal payment of $100,000 in 1993. The entire balance is classified
as current at March 31, 1996 and December 31, 1995.
F-5
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NUMBER AND DESCRIPTION PAGE NO.
10. Material contracts.
10.1 Asset Purchase Agreement dated March 29, 1996, by and among
Hvide Marine Incorporated, Seal Fleet, Inc., Sealcraft Operators,
Inc. Seal GP, Inc. and South Corporation and Thomas M. Ferguson.*
23. Consents of experts and counsel.
23.1 Consent of Rauscher Pierce Refsnes, Inc. ........................
23.2 Consent of Dufour Laskay & Associates, Inc. .....................
23.3 Consent of JF Moore, Inc. .......................................
27. Financial Data Schedule.*
99. Additional exhibits.
99.1 Fairness Opinion of Rauscher Pierce Refsnes, Inc. ...............
99.2 Annual Report of the Company for the year ended
December 31, 1995*
99.2 Form of Proxy*
______________________
* Previously filed
<PAGE>
EXHIBIT 23.1
We hereby consent to the use of our letter dated April 25, 1996, to the Board of
Directors of Seal Fleet, Inc. and all references thereto and to this firm's
fairness opinion contained in the Proxy Statement of Seal Fleet, Inc., prepared
in connection with the 1996 Annual Meeting of Stockholders of Seal Fleet, Inc.
DATE: April 25, 1996
RAUSCHER PIERCE REFSNES, INC.
By: /s/ G. Clyde Buck
----------------------------
G. Clyde Buck
Managing Director
<PAGE>
EXHIBIT 23.2
We hereby consent to the use of our Fair Market Value Surveys dated April 17,
May 2, and May 27, 1996, relating to the "CHINA SEAL", "PEGASUS SEAL", "HAWKE
SEAL", "BAFFIN SEAL", "BALTIC SEAL", "BENGAL SEAL", "INDIAN SEAL", and "ROSS
SEAL", and related materials regarding valuation survey methods and all
references thereto contained in the Proxy Statement of Seal Fleet, Inc.,
prepared in connection with the 1996 Annual Meeting of Stockholders of Seal
Fleet, Inc.
Dated: May 31, 1996
DUFOUR, LASKAY & ASSOCIATES, INC.
By: /s/ N. F. Laskay
---------------------------------
Name: N. F. Laskay
Title: Vice President
<PAGE>
EXHIBIT 23.3
CONSENT
We hereby consent to the use of our Valuation Statements dated March 29, 1996,
relating to the China Seal and Pegasus Seal, our letter dated March 29, 1996, to
Sealcraft Operators, Inc. Regarding Valuation Survey Methods and our Condition
and Valuation Surveys dated April 9, 1996 to Sealcraft Operators, Inc. on the
Hawke Seal, China Seal and Pegasus Seal and all references thereto contained in
the Proxy Statement of Seal Fleet, Inc. Prepared in connection with the 1996
Annual Meeting of Stockholders of Seal Fleet, Inc.
DATE: May 29, 1996
J.F. Moore, Inc.
By: /s/ J.F. Moore II
----------------------------
J. F. Moore II
President
<PAGE>
EXHIBIT 99.1
April 25, 1996
Seal Fleet, Inc.
P. O. Box 1168
Galveston, Texas 77553
Attention: Board of Directors
Ladies and Gentlemen:
You have advised Rauscher Pierce Refsnes, Inc. ("RPR") that Hvide Marine
Incorporated, a Florida corporation ("Hvide") has proposed to acquire certain
supply boats and other assets of Seal Fleet, Inc., a Nevada corporation, ("Seal
Fleet") at a price of not less than $6.3 million in cash plus the guaranty by
Hvide of Seal Fleet's $3.0 million Modified Note due to Three R Trusts. The
transaction also involves certain debt forgiveness under a related agreement
between Hvide and five affiliated partnerships. You have requested that RPR
issue an opinion ("Opinion") as to the fairness to the Class A public common
stockholders of Seal Fleet of the financial terms of the proposed transaction as
set forth in two Asset Purchase Agreements dated March 29, 1996.
RPR, as part of its investment banking business, is continually engaged in
the valuation of businesses and their securities in connection with mergers and
acquisitions, negotiated underwritings, secondary distributions of listed and
unlisted securities, private placements, and valuations for estate, corporate
and other purposes.
In arriving at our opinion, we have, among other things:
1. Reviewed an "Asset Purchase Agreement" dated March 29, 1996 between
Seal Fleet and Hvide Marine;
2. Reviewed an "Asset Purchase Agreement" dated March 29, 1996 among
Hvide Marine and five affiliated partnerships: Ross Seal Partners,
Bengal Seal Partners, Indian Seal Partners, Baffin Seal Partners and
Baltic Seal Partners;
3. Reviewed Seal Fleet's Form 10-K for the years ended December 31, 1995
and December 31, 1994;
4. Reviewed Seal Fleet's Form 10-Q for the quarters ended March 31, June
30 and September 30, 1995 and 1994;
5. Reviewed J. F. Moore, Inc. valuation survey for M/V China Seal and M/V
Pegasus Seal marine vessels dated March 29, 1996 and prepared as of
March 27, 1996 and March 23, 1996;
<PAGE>
6. Reviewed Dufour, Laskay & Associates, Inc. valuation survey for M/V
China Seal, M/V Hawke Seal and M/V Pegasus Seal dated April 17, 1996;
7. Reviewed a Seal Fleet statement of assets to be sold and statement of
vessel operations for the period January 1, 1995 through September 30,
1995 and the years ended December 31, 1994, December 31, 1993 and
December 31, 1992 (a document prepared near April 12, 1996 which was
marked "tentative and preliminary");
8. Reviewed a Seal Fleet estimate prepared on April 16, 1996 of pro forma
"post-closing" balance sheet values for Seal Fleet after the
proposed transaction;
9. Reviewed Seal Fleet's 1996 revenue and operating cost budgets prepared
in December, 1995;
10. Reviewed Seal Fleet's master time charter agreement for M/V China Seal
and M/V Hawke Seal;
11. Considered such other information, financial studies, analyses and
investigations as we deemed relevant under the circumstances; and
12. Discussed with management of Seal Fleet the outlook for future
operating results, the assets and liabilities of the Company, material
in the foregoing documents, and other matters we considered relevant
to our inquiry.
In our review and in arriving at our opinion, we have, with your
permission, (i) not independently verified any of the foregoing information and
have relied upon its being complete and accurate in all material respects, and
(ii) not made an independent evaluation or appraisal of specific assets of Seal
Fleet. Our opinion is provided to you pursuant to the terms of our engagement
letter dated April 9, 1996.
Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof, the consideration to be received pursuant to the proposed
transaction is fair to the Class A public common stockholders of Seal Fleet from
a financial point of view.
RAUSCHER PIERCE REFSNES, INC.
By: /s/ Clyde Buck
-------------------------------------
G. Clyde Buck
Managing Director
