<PAGE>
Registration No. 33-42965
Filed Pursuant to Rule 424(b)(3)
SUPPLEMENT DATED FEBRUARY 23, 1995
TO PROSPECTUS DATED AUGUST 12, 1993
117,526,588 Shares of Common Stock
Energy Service Company, Inc.
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On February 21, 1995, the Board of Directors of Energy Service
Company, Inc. (the "Company") declared a dividend of one preferred share
purchase right (a "Right") for each outstanding share of common stock, par
value $.10 per share, of the Company (the "Common Stock"). The dividend is
payable on March 6, 1995 (the "Record Date") to the stockholders of record
on that date. Each Right entitles the registered holder to purchase from
the Company one one-hundredth of a share of Series A Junior Participating
Preferred Stock, par value $1.00 per share (the "Preferred Stock") of the
Company at a price of $50.00 per one one-hundredth of a share of Preferred
Stock (the "Purchase Price"), subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement dated as of
February 21, 1995, (the "Rights Agreement"), between the Company and
American Stock Transfer & Trust Company, as Rights Agent (the "Rights
Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons has
acquired beneficial ownership of 15% or more of the outstanding shares of
Common Stock (thereby becoming an Acquiring Person ) or (ii) 10 business
days (or such later date as may be determined by action of the Board of
Directors prior to such time as any person or group of affiliated persons
becomes an Acquiring Person) following the commencement of, or announcement
of an intention to make, a tender offer or exchange offer the consummation
of which would result in the beneficial ownership by a person or group of
15% or more of the outstanding shares of Common Stock (the earlier of such
dates being called the "Distribution Date"), the Rights will be evidenced,
with respect to any of the Common Stock certificates outstanding as of the
Record Date, by such Common Stock certificate together with a copy of a
Summary of Rights to Purchase Shares of Preferred Stock of Energy Service
Company, Inc. (the "Summary of Rights") that will be mailed to the holders
of such stock as of the Record Date.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Stock. Until the Distribution
Date (or earlier redemption or expiration of the Rights), new Common Stock
<PAGE>
certificates issued after the Record Date upon transfer or new issuances of
Common Stock will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates
for shares of Common Stock outstanding as of the Record Date, even without
such notation or a copy of the Summary of Rights, will also constitute the
transfer of the Rights associated with the shares of Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as
of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights. Rights will be issued with
all shares of Common Stock issued between the Record Date and the
Distribution Date.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on February 21, 2005 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case as described
below. Additionally, the Rights are not exercisable after an Acquiring
Person becomes such until such time as the Company s right of redemption
described below has expired.
The Purchase Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the Rights
is subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of
the Preferred Stock of certain rights or warrants to subscribe for or
purchase Preferred Stock at a price, or securities convertible into
Preferred Stock with a conversion price, less than the then-current market
price of the Preferred Stock or (iii) upon the distribution to holders of
the Preferred Stock of evidences of indebtedness or assets (excluding
regular periodic cash dividends or dividends payable in Preferred Stock) or
of subscription rights or warrants (other than those referred to above).
The number of outstanding Rights is also subject to adjustment in the
event of a stock split of the Common Stock or a stock dividend on the
Common Stock payable in shares of Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such
case, prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights will
not be redeemable. Each share of Preferred Stock will be entitled, when,
as and if declared, to a minimum preferential quarterly dividend payment of
$1.00 per share but will be entitled to an aggregate dividend of 100 times
the dividend declared per share of Common Stock. In the event of
liquidation, the holders of the Preferred Stock will be entitled to a
minimum preferential liquidation payment of $100.00 per share (plus any
accrued but unpaid dividends) but will be entitled to an aggregate payment
of 100 times the payment made per share of Common Stock. Each share of
Preferred Stock will have 100 votes, voting together with the Common Stock.
Finally, in the event of any merger, consolidation or other transaction in
which shares of Common Stock are converted or exchanged, each share of
<PAGE>
Preferred Stock will be entitled to receive 100 times the amount received
per share of Common Stock. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a share
of Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right, other than
Rights beneficially owned by the Acquiring Person (which will thereupon
become void), will thereafter have the right to receive upon exercise of a
Right at the then-current exercise price of the Right, that number of
shares of Common Stock having a market value of two times the exercise
price of the Right.
In the event that, after a person or group has become an Acquiring
Person, the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are
sold, proper provisions will be made so that each holder of a Right (other
than Rights beneficially owned by an Acquiring Person which will have
become void) will thereafter have the right to receive, upon the exercise
thereof at the then-current exercise price of the Right, that number of
shares of common stock of the person with whom the Company has engaged in
the foregoing transaction (or its parent) which at the time of such
transaction will have a market value of two times the exercise price of the
Right.
At any time after any person or group becomes an Acquiring Person and
prior to the earlier of one of the events described in the previous
paragraph or the acquisition by such person or group of 50% or more of the
outstanding shares of Common Stock, the Board of Directors of the Company
may exchange the Rights (other than Rights owned by such person or group
which will have become void), in whole or in part, for shares of Common
Stock, or one one-hundredths of a share of Preferred Stock (or shares of a
class or series of the Company's preferred stock having equivalent rights,
preferences and privileges), having a value per Right equal to the
difference between the market value of the shares of Common Stock
receivable upon exercise of the Right and the exercise price of the Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1%
in such Purchase Price. No fractional shares of Preferred Stock will be
issued (other than fractions which are integral multiples of one one-
hundredth of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), and in lieu thereof an
adjustment in cash will be made based on the market price of the Preferred
Stock on the last trading day prior to the date of exercise.
At any time prior to the close of business on the tenth day following
a public announcement that an Acquiring Person has become such, the Board
of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price"); provided,
<PAGE>
however, that the Rights may not be redeemed following any merger to which
the Company is a party that (i) occurs after an Acquiring Person becomes
such and (ii) was not approved by the Board of Directors and by the
stockholders of the Company. The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board
of Directors in its sole discretion may establish. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the
Redemption Price.
For so long as the Rights are then redeemable, the Company may, except
with respect to the redemption price, amend the Rights in any manner.
After the Rights are no longer redeemable, the Company may, except with
respect to the redemption price, amend the Rights in any manner that does
not adversely affect the interests of holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
Because of the method of operation and financing of certain vessels
owned or to be owned by the Company, the Shipping Act, 1916, and the
Merchant Marine Act, 1936, require that the Company limit the ownership of
its capital stock by persons other than citizens of the United States,
within the meaning of such Acts. In accordance with such Acts, the
Company s Restated Certificate of Incorporation contains, among other
things, restrictions on transfers of its capital stock to, and the voting
of its capital stock by, persons other than citizens of the United States.
Similarly, the Rights Agreement generally provides that no Right may be
exercised if the Company determines (prior to the issuance of the Preferred
Stock (or other securities or property) issuable upon exercise of such
Right) that (i) (A) the Preferred Stock (or other securities or property)
issuable upon exercise of such Right, or any interest therein or right
thereof, would be owned or controlled by persons other than United States
citizens and (B) after any such exercise, persons other than United States
citizens would own or control an aggregate percentage of the shares of
capital stock of the Company or any interest therein or right thereof in
excess of the Permitted Percentage (as defined in the Restated Certificate
of Incorporation of the Company) or (ii) that the exercise of such Right
would otherwise cause the Company not to be a citizen of the United
States within the meaning of the Shipping Act, 1916.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the
Company in certain circumstances. Accordingly, the existence of the Rights
may deter certain acquirors from making takeover proposals or tender
offers. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors of the Company since the
Board of Directors may, at its option, at any time prior to the close of
business on the tenth day following a public announcement that an Acquiring
Person has become such, redeem all but not less than all the then
outstanding Rights at $.01 per Right.
<PAGE>
For the purposes of the Rights Agreement, the Board of Directors has
established the Series A Junior Participating Preferred Stock with
1,250,000 authorized shares, none of which were outstanding as of the date
of this Prospectus, from the shares of preferred stock the Board of
Directors is authorized pursuant to the Company's Restated Certificate of
Incorporation to establish and issue by resolution without any further
stockholder approval. Shares of the Series A Junior Participating
Preferred Stock may be purchased pursuant to the terms and conditions of
the Rights Agreement. Rights and privileges of the Series A Junior
Participating Preferred Stock are set forth in the form of Certificate of
Designations which is included as an Exhibit to the Rights Agreement that
is an Exhibit to the Current Report on Form 8-K of the Company dated
February 23, 1995. The foregoing description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement.
<PAGE>
