SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A-1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
Commission File Number 0-28732
HVIDE MARINE INCORPORATED
(Exact name of registrant as specified in its charter)
Florida 65-0524593
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2200 Eller Drive, P.O. Box 13038
Ft. Lauderdale, Florida 33316
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (954) 523-2200
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock, $.001 par value
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. YES X NO __
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the registrant's Common Stock held by
non-affiliates of the registrant at March 29, 1999 (based on the closing price
of such stock on the Nasdaq National Market) was $53,359,600.
At March 19, 1999, there were 12,879,509 shares of the registrant's
Class A Common Stock outstanding and 2,547,064 shares of its Class B Common
Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE>
This Amendment is being filed to provide the information called for by
Items 10 through 13 of the Annual Report on Form 10-K of Hvide Marine
Incorporated (the "Company") for the year ended December 31, 1998.
PART III
Item 10. Directors and Executive Officers of the Registrant
Directors
The Company's Articles of Incorporation and Bylaws provide for the
division of the Board of Directors into three classes, designated Class I, Class
II, and Class III, with staggered terms of three years. The terms of the Class
I, Class II, and Class III Directors currently expire in 2000, 2001, and 1999,
respectively, or until their respective successors are duly elected.
The Board currently consists of 11 members: Class I, comprised of
Raymond B. Vickers, Robert Rice and Josiah O. Low, III; Class II, comprised of
Eugene F. Sweeney, Walter C. Mink, John H. Blankley and John J. Lee; and Class
III, comprised of J. Erik Hvide, Jean Fitzgerald, Gerald Farmer and Robert B.
Calhoun, Jr.
Pursuant to a shareholders agreement (the "Shareholders Agreement")
entered into in 1996 by the Company, J. Erik Hvide, Hvide Family Trust I and
Hvide Family Trust II (the "Hvide Trusts"), and a group of investors (the
"Investor Group"), J. Erik Hvide has agreed to vote his shares of Common Stock
for certain individuals designated by the Investor Group, and the Investor Group
has agreed to vote its shares of Common Stock for certain individuals designated
by J. Erik Hvide and the Hvide Trusts. Messrs. Calhoun and Lee are the directors
currently serving pursuant to the designation of the Investor Group, and Messrs.
Hvide, Blankley, Sweeney, Farmer, Fitzgerald, Mink, Rice and Vickers are the
directors currently serving pursuant to the designation of J. Erik Hvide and the
Hvide Trusts. This description of the terms of the Shareholders Agreement is
qualified by reference to the Shareholders Agreement, as amended, which has been
filed with the Securities and Exchange Commission (the "Commission").
The following are the current members of the Board of Directors:
<TABLE>
<CAPTION>
Name Age Current Positions
<S> <C> <C>
J. Erik Hvide....................... 50 Chairman of the Board, President, Chief Executive Officer and Director
John H. Blankley.................... 51 Executive Vice President, Chief Financial Officer and Director
Eugene F. Sweeney................... 56 Executive Vice President, Chief Operating Officer and Director
Robert B. Calhoun, Jr............... 56 Director
Gerald Farmer....................... 53 Director
Jean Fitzgerald..................... 73 Director
John J. Lee......................... 62 Director
Josiah O. Low, III.................. 59 Director
Walter C. Mink...................... 72 Director
Robert Rice......................... 76 Director
Raymond B. Vickers.................. 50 Director
</TABLE>
<PAGE>
Mr. Hvide has been Chairman since 1994 and President and Chief
Executive Officer since 1991. He has been a director of the Company since 1973.
From 1981 until 1991, Mr. Hvide was President and Chief Operating Officer. He
has been employed by the Company in various capacities since 1970 and became
Vice President in 1973. He is a past director of the American Waterways
Operators, a past Chairman of the Board of the American Institute of Merchant
Shipping and a past appointee to the U.S. Coast Guard's Towing Safety Advisory
Committee. In 1998, he was inducted into the International Maritime Hall of
Fame. He is immediate past president of the Port Everglades Association and
former director of the United Way of Broward County. Mr. Hvide is a director of
Seal Holdings Corporation, a publicly traded company, and serves on the vestry
of St. Paul's Church. He was formerly chairman of the Board of Trustees of Saint
Andrew's School. Mr. Hvide is the son of Hans J. Hvide, the founder of the
Company.
Mr. Blankley has been a director of the Company since 1991 and
Executive Vice President--Chief Financial Officer since 1995. He served as a
director and Chief Financial Officer of Harris Chemical Group Inc., a chemical
manufacturing company, from 1993 to 1994. He served as Executive Vice
President--Finance and Chief Financial Officer of Stolt-Nielsen, Inc., a
publicly traded international operator of specialty chemical tankers, from 1985
to 1991. From 1983 until 1985, Mr. Blankley was a director, Senior Vice
President and Chief Financial Officer of BP North America Inc. Mr. Blankley is
also a director of MC Shipping, a publicly traded operator of petroleum product
and gas carriers and multi-purpose container feeder vessels.
Mr. Sweeney has been Chief Operating Officer since April 1998,
Executive Vice President since 1994 and a director since 1984. He was Senior
Vice President--Operations of the Company from 1991 to 1994. He joined the
Company in 1981 as Vice President--Ship Management. Prior to joining the
Company, Mr. Sweeney was employed for 17 years by Texaco, Inc., where he served
in seagoing and shore management positions, including operations manager of
Texaco's U.S. tanker fleet
Mr. Calhoun has been a director of the Company since 1994. Mr. Calhoun
has been a Managing Director of Monitor Clipper Partners, L.P., a private
investment firm, since 1997. Mr. Calhoun has been President of Clipper Asset
Management Corporation, the sole general partner of The Clipper Group, L.P., a
private investment firm, since 1991. From 1975 to 1991, Mr. Calhoun was a
Managing Director of CS First Boston Corporation, an investment banking firm.
Mr. Calhoun serves as a director of Avondale Mills, Inc., a textile company,
Interstate Bakeries Corporation, a national distributor of baked goods, and
several privately held companies.
Mr. Farmer has served as a director of the Company since 1975. He was
Executive Vice President--Chief Financial Officer and Treasurer of the Company
from 1994 until September 1995, when he retired as Chief Financial Officer and
Treasurer; he continued to serve as an Executive Vice President through December
15, 1995. He was Senior Vice President--Finance and Administration from 1991 to
1994, having joined the Company in 1973 as Vice President--Finance. From 1967 to
1973, Mr. Farmer was a Certified Public Accountant with Haskins & Sells, an
international auditing firm. He is President of JLF Investments, Inc., an
investment management and financial advisory firm, and is a past member of both
the American Institute and Florida Institute of Certified Public Accountants.
Mr. Fitzgerald has been a director of the Company since 1994. Since
1992, he has served as the Chairman of Florida Alliance, Inc., a consortium of
maritime interests. From 1990 to 1992, he was Executive Vice President of NDE
Testing & Equipment, Inc., a nationwide storage-tank testing company.
<PAGE>
From 1988 to 1990, he was with Frederic R. Harris, Inc., an international
consulting engineering firm. Mr. Fitzgerald was a co-founder and the President
of American Tank Testing Service, Inc., a firm that was subsequently acquired by
NDE Environmental Corporation, from 1986 to 1987. In 1982 and 1983, he served as
the Company's Vice President for Governmental Affairs. His other business
experience includes service as President of Tracor Marine, Inc. from 1976 to
1979 and Director of Engineering of Tracor's Systems Technology Division from
1974 to 1976. Mr. Fitzgerald retired from the U.S. Navy in 1974 in the rank of
Captain. During his naval career he commanded major fleet units at sea and
served in the offices of the Chief of Naval Operations and the Secretary of
Defense. He is a past Commissioner and Chairman of the Port Everglades
Authority.
Mr. Lee has been a director of the Company since 1994 and is Chairman
and Chief Executive Officer of Hexcel Corporation, an advanced materials
manufacturer. Mr. Lee joined the Board of Hexcel Corporation in May 1993 as an
independent director. In August 1993, Mr. Lee was asked to become the Chairman
and Co-Chief Executive Officer of Hexcel Corporation, which was experiencing
financial difficulties, in order to effect a consensual reorganization. In
December 1993, having concluded that a consensual reorganization could not be
accomplished, Hexcel Corporation filed for protection under Chapter 11 of the
Federal Bankruptcy Code and appointed Mr. Lee sole Chief Executive Officer to
effect a Plan of Reorganization. The reorganization was completed in February
1995, when Hexcel emerged from Chapter 11. Mr. Lee has been Chairman, President
and Chief Executive Officer of Lee Development Corporation, a corporation
providing investment and merchant banking services, since 1987. He was a
director of XTRA Corporation, a Massachusetts-based transportation and equipment
leasing company, from 1990 to 1996 and a director of Aviva Petroleum, Inc. from
1993 to 1998. Mr. Lee also served as Chairman and Chief Executive Officer of
Seminole Corporation, a fertilizer manufacturer, from 1989 to April 1993 and
director of Tosco Corporation, a refiner, from 1988 to 1993 and was President
and Chief Operating Officer of Tosco Corporation from 1990 to 1993. Mr. Lee is
an advisor to The Clipper Group, L.P. and is a trustee of Yale University.
Mr. Low has been a director of the Company since March 1998. Since
1985, he has been an investment banker with Donaldson, Lufkin & Jenrette
Securities Corporation, where he is currently a Managing Director. Mr. Low
serves as a director of Musicland Stores Corporation, Centex Development
Corporation and St. Laurent Paperboard, Inc.
Mr. Mink has been a director of the Company since 1990. He is President
of Walter C. Mink & Associates, a maritime advisory and consulting firm in Las
Vegas, Nevada. From 1978 to 1986, Mr. Mink was President of Mobil Shipping and
Transportation Company. Previously, he was President of Seabrokers, Inc., a
marine brokerage firm, and was earlier employed by Lago Oil, Esso Tankers, and
Mobil Oil Transport. Mr. Mink is a director of First Olsen Tankers, Ltd. He
served on the Board of Managers of the American Bureau of Shipping and is a
member of the Society of Naval Architects and Marine Engineers.
Mr. Rice has been a director of the Company since 1992. A financial
consultant, he was Senior Vice President of Citibank, N.A. from 1954 to his
retirement in 1983. Mr. Rice is a director of ATCO Ltd., First Olsen Tankers
Ltd., and Pride Refining Inc.
Dr. Vickers has been a director of the Company since 1994. An attorney
in private practice in Florida, he has represented more than a hundred financial
institutions. He is the author of Panic in Paradise: Florida's Banking Crash of
1926 and an adjunct professor of U.S. economic and business history at Florida
State University. From 1975 to 1979, he served as Assistant Comptroller of the
State of Florida.
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers and directors, and persons who own
more than ten percent of the Company's Common Stock, to file reports of
ownership and changes in ownership with the Commission. The Company believes
that each such person complied with such filing requirements during and with
respect to 1998, except for the following persons: J. Fitzgerald, who failed to
timely file a Form 4 for August 1998 to report one transaction; J. Krumenacker,
W. Ludt, J. O'Connell and S. Willrich, who each failed to timely file a Form 4
for December 1998 to report one transaction; L. Carey, A. Denning, and C.
Strong, who each failed to timely file a Form 4 for December 1998 to report two
transactions; and J. Kimbrell, who failed to timely file a Form 5 for 1998.
<PAGE>
Item 11. Executive Compensation
The following table sets forth the compensation of the Chief Executive
Officer and each of the other four most highly compensated executive officers
whose individual remuneration exceeded $100,000 for 1996, 1997 and 1998 (the
"Named Executives").
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term Compensation
Awards Payouts
Restricted Securities
All
Name and Annual Compensation Other Annual Stock Underlying LTIP Other
-----------------------
Principal Position Year Salary Bonus(1) Compensation(2) Awards Options Payouts Compensation(3)
- ------------------ ---- ---------- ----------- ---------------- -------- --------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J. Erik Hvide.. 1998 $ 485,000 $ 221,000 $ -- -- 38,600 -- $ 14,512
Chief Executive 1997 450,000 422,500 -- -- -- -- 14,469
Officer 1996 469,513 160,000 -- -- 100,000 -- 11,648
John H. Blankley 1998 250,000 65,000 -- -- 11,400 -- 12,352
Executive Vice 1997 210,000 111,100 -- -- -- -- 12,352
President -- 1996 203,788 50,000 -- -- 100,000 -- 10,848
Chief Financial
Officer
Eugene F. Sweeney 1998 250,000 65,000 -- -- 11,400 -- 13,000
Executive Vice 1997 200,000 107,000 -- -- -- -- 12,352
President -- 1996 185,288 50,000 -- -- 100,000 -- 11,040
Operations
Walter S. Zorkers(4) 1998 215,385 39,000 -- -- 6,800 -- 34,514
Senior Vice 1997 122,051 59,800 -- -- 25,000 -- 864
President --
Corporate
Development
Andrew W. Brauninger 1998 180,000 39,000 -- -- 6,200 -- 10,864
Senior Vice 1997 138,333 55,000 -- -- 5,000 -- 12,064
President -- 1996 115,000 32,000 -- -- 25,000 -- 9,738
Offshore Division
</TABLE>
(1) Under the Company's Key Employee Stock Compensation Plan (the "Key Employee
Plan"), an employee designated by the Compensation Committee can elect to
receive up to 50% of his or her bonus in the form of units, each
representing a share of Class A Common Stock, that are credited to an
account. The account has two components. The first or "basic" component
consists of units representing Class A Common Stock equal in value to the
portion of the bonus that has been deferred. This component is immediately
vested in full; however, shares represented by this component are not
delivered to the individual until the first day of the year in which the
third anniversary of the crediting occurs (subject to earlier delivery in
the case of death or disability or in certain other circumstances). The
second or "premium" component consists of units representing Class A Common
Stock equal in value to 25% of the portion of the bonus that has been
deferred. This component does not vest until the first day of the year in
which the third anniversary of the crediting occurs, subject to earlier
vesting in the circumstances referred to above. The amounts deferred with
respect to bonuses for 1998 were: Mr. Hvide - $33,152; Messrs. Blankley and
Sweeney - $16,250; and Mr. Brauninger - $18,900. The amounts deferred with
respect to bonuses for 1997 were: Mr. Hvide - $61,500; Mr. Blankley -
$21,250; Mr. Sweeney - $20,500; Mr. Zorkers - $14,950; and Mr. Brauninger -
$27,500. The Key Employee Plan was not effective for bonuses with respect
to 1996.
(2) None of the named executives received perquisites or other personal
benefits in an amount sufficient to require reporting in this column, nor
did any of them receive any other compensation required to be reported in
this column.
(3) For 1998, consists of Company 401(k) contributions of $11,200 for each of
Messrs. Hvide, Blankley, Sweeney and Zorkers and $10,000 for Mr. Brauninger
and life insurance premium payments of $3,312, $1,152, $1,800, and $864 for
Messrs. Hvide, Blankley, Sweeney and Brauninger, respectively.
(4) Mr. Zorkers became an executive officer of the Company effective May 1,
1997.
<PAGE>
The following table contains information concerning stock options
granted to each of the Named Executives in 1998. All options were granted
pursuant to the Hvide Marine Incorporated Equity Ownership Plan.
<TABLE>
<CAPTION>
Potential Realizable
Percent Value at Assumed
Total Shares Annual Rates
Shares Underlying of Stock
Underlying Options Per Share Appreciation for
Options Granted Exercise Expiration Option Term(2)
Name Granted(1) to Employees Price Date 5% 10%
---- ---------- ------------ -------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
J. Erik Hvide.................. 38,600 19.1% $ 14.375 6/2/08 $ 348,958 $ 884,328
John H. Blankley............... 11,400 5.6% 14.375 6/2/08 103,060 261,175
Eugene F. Sweeney.............. 11,400 5.6% 14.375 6/2/08 103,060 261,175
Walter S. Zorkers.............. 6,800 3.4% 14.375 6/2/08 61,474 155,788
Andrew Brauninger.............. 6,200 3.1% 14.375 6/2/08 56,050 142,042
</TABLE>
(1) Options vest 25% annually over four years, and all unvested options vest
upon retirement.
(2) The dollar amounts are the result of calculations at specified rates of
appreciation and are not intended to forecast possible future appreciation.
The following table contains information concerning stock option
exercises during 1998 and the year-end value of unexercised options:
<TABLE>
<CAPTION>
Number of Number of Shares Value of Unexercised
Shares Underlying Unexercised In-the-Money
Acquired Options at Options at
on Value December 31, 1998 December 31, 1998(1)
--------------------------- -----------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------- ----------- ------------ -------------- --------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
J. Erik Hvide......... -- $ -- 50,000 90,600 $ -- $ --
John H. Blankley...... -- -- 50,000 61,400 -- --
Eugene F. Sweeney..... -- -- 50,000 61,400 -- --
Walter S. Zorkers..... -- -- 6,250 25,550 -- --
Andrew Brauninger..... -- -- 13,750 22,450 -- --
</TABLE>
(1) Based upon the last reported sale price of the Class A Common Stock of
$5.00 per share on December 31, 1998, as reported on the Nasdaq National
Market.
Compensation of Directors
Directors not employed by the Company are paid $2,000 for each Board
and committee meeting attended ($1,000 for telephonic attendance) and are
reimbursed by the Company for reasonable out-of-pocket expenses incurred for
attendance at such meetings. All committee chairmen not employed by the Company
are also paid an annual retainer of $5,000. The Company granted each nonemployee
director 500 shares of Class A Common Stock following its 1998 Annual Meeting of
Shareholders. The Company intends to grant each director 500 shares of Class A
Common Stock each year.
Under the Company's stock option plan for nonemployee directors (the
"Directors Plan"), all directors not employed by the Company are annually
granted an option to purchase 2,000 shares of Class A Common Stock at an
exercise price equal to the fair market value of the Class A Common Stock on the
date of grant (the first business day following the annual meeting of
shareholders). Directors elected to the
<PAGE>
Board in the future are each to be granted an option to purchase 5,000 shares at
an exercise price equal to the fair market value of the Class A Common Stock as
of the first business day following the shareholder meeting at which the
director is elected to the Board. All stock options under the Directors Plan
vest at the earliest of death, disability, change in control of the Company,
voluntary retirement from the Board at or after age 62, completion of ten years'
service on the Board, or one year after the date of grant.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Company's Board of Directors consists
of Messrs. Farmer, Fitzgerald, Lee and Vickers.
The Company has a verbal agreement with Mr. Farmer and a written
consulting agreement with Mr. Fitzgerald to provide financial and technical
consulting services, respectively, to the Company. During 1998 Mr. Fitzgerald
received total compensation of $96,000 and Mr. Farmer received $0. Mr. Farmer's
agreement may be terminated by either party without notice. Mr. Fitzgerald's
agreement currently expires on December 31, 1999, but is subject to automatic
one-year renewals unless written notice to the contrary is given by either party
at least 60 calendar days prior to the expiration of the term then in effect.
The Company also provides a portion of the funding for Florida Alliance, Inc., a
consortium of maritime interests of which Mr. Fitzgerald is Chairman.
Mr. Vickers is the principal of Raymond B. Vickers P.A., which has
represented the Company in certain litigation and other matters. During 1998 the
Company paid $256,089 to Raymond B. Vickers P.A in connection therewith. Raymond
B. Vickers P.A. also performs legal services for Florida Alliance, Inc.
Item 12. Security Ownership of Certain Beneficial Owners And Management
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of March 31, 1999 by (i) each person
who is known by the Company to be the beneficial owner of more than five percent
of the Company's outstanding Common Stock, (ii) each director of the Company,
(iii) each Named Executive, and (iv) all directors and executive officers of the
Company as a group. Except as otherwise indicated, the Company believes that the
beneficial owners of the Common Stock listed, based on information furnished by
such owners, have sole investment and voting power with respect to such shares,
subject to community property laws where applicable.
<PAGE>
<TABLE>
<CAPTION>
Class A Common Stock Class B Common Stock
Percent Percent Percent
Number of Class Number of Class of Total
Name and Address of Beneficially Beneficially Beneficially Beneficially Voting
Beneficial Owner(1) Owned Owned Owned Owned Power
<S> <C> <C> <C> <C> <C>
Hvide Trust Limited, L.P............... -- * 1,496,466 58.8% 39.2%
Hvide Holdings Corp.(2)................ -- * 1,496,466 58.8% 39.2%
J. Erik Hvide(2)....................... 64,000 * 1,496,466 58.8% 39.2%
Clipper/Park HMI, L.P.(3).............. 214,059 1.7% 649,979 25.5% 17.5%
Clipper/Merban, L.P.(3)................ 305,475 2.5% 111,960 4.4% 3.7%
Clipper/Merchant HMI, L.P.(3).......... 85,625 * 259,990 10.2% 7.0%
Clipper Capital Associates, L.P.(3)(4). 614,924 4.8% 1,050,598 41.2% 29.0%
Metropolitan Life Insurance Company(3). 71,820 * -- -- *
Olympus Growth Fund II, L.P.(3)........ 510,384 4.0% -- -- *
John H. Blankley....................... 1,894 * -- -- *
Eugene F. Sweeney...................... 15,886 * -- -- *
Andrew Brauninger...................... 12,812 * -- -- *
Robert B. Calhoun, Jr.(4).............. 659,029 5.1% 1,050,598 41.2% 29.1%
Gerald Farmer.......................... 15,416 * -- -- *
Jean Fitzgerald........................ 6,956 * -- -- *
John J. Lee (5)........................ 5,292 * -- -- *
Josiah O. Low, III..................... 2,862 * -- -- *
Walter C. Mink......................... 3,583 * -- -- *
Robert Rice............................ 3,500 * -- -- *
Raymond B. Vickers..................... 13,500 * -- -- *
Ryback Management Corporation(6)(7).... 1,052,640 7.64% -- -- *
Wellington Management Company, LLP(8).. 1,215,900 10.44% -- -- *
Pilgrim Baxter & Associates, Ltd.(9)... 1,094,100 9.04% -- -- *
PBHG Growth Fund(9).................... 744,600 6.15% -- -- *
Loomis, Sayles & Company, L.P.(10)..... 1,685,004 11.62% -- -- *
The Equitable Companies Incorporated(11) 818,400 6.0% -- -- *
All executive officers and directors
as a group (21 persons).............. 819,150 6.4% 2,547,064 100.0% 68.6%
</TABLE>
* Less than one percent
(1) Unless otherwise indicated, the address of each person whose name appears
in the table above is c/o Hvide Marine Incorporated, 2200 Eller Drive, P.O.
Box 13038, Fort Lauderdale, Florida 33316.
(2) Includes shares directly held by Hvide Trust Limited, L.P. (AHvide Trust@).
Hvide Holdings Corp. ("Hvide Holdings") is the sole general partner of
Hvide Trust and J. Erik Hvide is the sole shareholder of Hvide Holdings,
with sole power to act on its behalf. A substantial portion of the shares
beneficially owned by Mr. Hvide (including the shares owned by Hvide Trust)
are pledged to secure borrowings. In the event such shares were sold
pursuant to such pledges (resulting in the conversion of the shares of
Class B Common Stock into Class A Common Stock), the shares of Class B
Common Stock beneficially owned by Clipper Capital Associates, L.P. would
represent in the aggregate 71.4% of the outstanding shares of such Class
and 36.5% of the voting power of all of the Company's Common Stock. Mr.
Hvide has advised the Company that some or all of the shares currently
subject to such pledges are expected to be released therefrom during 1999;
however, no assurance can be given as to whether or when such release will
be effected or the number of shares as to which pledges will be released.
(3) Member of the Investor Group, defined as the "Investor Shareholders" in the
Company's Articles of Incorporation. The Investor Group owns an aggregate
of 614,924 shares of Class A Common Stock and 1,050,598 shares of Class B
Common Stock. The address of Clipper Capital Associates, L.P. ("Clipper
Capital"), Clipper/Merban, L.P., Clipper/Merchant HMI, L.P., Clipper/ Park
HMI, L.P. is c/o Clipper Capital Associates, L.P., 650 Madison Avenue, 9th
Floor, New York, New York 10022. The address of Metropolitan Life Insurance
Company is 334 Madison Avenue, P.O. Box 633, Convent Station, New Jersey
07961-0633. The address of Olympus Growth Fund II, L.P. is c/o Olympus
Partners, Metro Center, One Station Place, Stamford, Connecticut 06902.
(4) Includes 9,442 shares owned by Clipper Capital and an aggregate of 614,601
shares held by Clipper/Merban, L.P., Clipper/Merchant, L.P. and
Clipper/Park, L.P. (collectively, the "Clipper Limited Partnerships").
Clipper Capital is the general partner of the Clipper Limited Partnerships,
and Mr. Calhoun is an officer, director and stockholder of the corporate
general partner of Clipper Capital; thus, Clipper Capital and Mr. Calhoun
may each be deemed to be the beneficial owner of the shares held by the
Clipper Limited Partnerships.
(5) Excludes 17,985 shares in which John J. Lee has a pecuniary interest as an
investor in the Clipper Limited Partnerships.
(6) Based upon a Schedule 13G filed with the Commission on February 10, 1999.
The address of Ryback Management Corporation is 7711 Carondelet Avenue, Box
16900, St. Louis, Missouri 63105.
(7) Represents shares of Class A Common Stock issuable upon conversion of
convertible securities of Hvide Capital Trust.
(8) Based upon a Schedule 13G filed with the Commission on August 8, 1997. The
address of Wellington Management Company, LLP is 75 State Street, Boston,
Massachusetts 02109.
(9) Based upon a Schedule 13G filed with the Commission on February 18, 1998.
The address of Pilgrim Baxter & Associates, Ltd. and PBHG Growth Fund is
825 Duportail Road, Wayne, Pennsylvania 19087.
<PAGE>
(10)Based upon a Schedule 13G/A filed with the Commission on February 10, 1999.
The address of Loomis, Sayles & Company, L.P. is One Financial Center,
Boston, Massachusetts 02111.
(11)Based upon a Schedule 13G filed with the Commission on February 10, 1999.
The address of the Equitable Companies Incorporated is 1290 Avenue of the
Americas, New York, New York 10104.
Item 13. Certain Relationships and Related Transactions
The following are descriptions of certain relationships and
transactions between the Company, its directors, executive officers and certain
other persons. Information regarding transactions with certain directors appears
under "Compensation Committee Interlocks and Insider Participation" in Item 11
above.
The Company has a non-compete agreement with Hans J. Hvide, the founder
of the Company and father of its current Chairman, pursuant to which Mr. Hvide
receives a fee of $185,000 each year (subject to annual adjustment based on the
Consumer Price Index) in exchange for an agreement not to provide any services
to any person in competition with the Company. The agreement expires upon the
earlier of September 30, 2014 or the death of Mr. Hvide. The agreement can be
terminated by the Company only if Mr. Hvide materially breaches the agreement,
and by Mr. Hvide only if the Company fails to pay the specified fee.
The Company also has a post-retirement benefits agreement with Mr.
Hvide pursuant to which he receives the use of an automobile, major medical
health insurance for himself and for his spouse, the use of an office and
secretarial assistance, and a payment of $2,000 each month in lieu of other
expenses. The term of the agreement is for the life of Mr. Hvide, except that
(1) major medical health insurance is to be provided for the life of Mr. Hvide's
spouse, and (2) in the event the Company terminates the non-compete agreement,
the post-retirement benefits agreement terminates automatically.
Maritime Transport Development Corp. ("Maritime Transport"), a company
wholly owned by Hans J. Hvide, is the successor in interest to the entity that
developed and engineered and provides marketing services for the CATUG(R) vessel
design. Maritime Transport receives a commission equal to 1.25% of charter hire
received by the Company for two such vessels as payment for development and
engineering services relating to the vessels. Commissions earned for 1998 were
approximately $203,000.
At December 31, 1998, Maritime Transport was indebted to the Company
for approximately $163,000 for accounts receivable, which accounts are currently
accruing interest at a rate of 7.5%.
The Company has entered into agreements to indemnify J. Erik Hvide and
Hans J. Hvide in connection with certain matters, subject to and in accordance
with Florida law. These agreements also provide that the Company will advance
expenses (including legal fees) incurred by both individuals, subject to their
undertaking to reimburse the Company for such expenses if it is determined that
they are not entitled to indemnification under Florida law.
In August 1996, the Company, the Investor Group, J. Erik Hvide, the
Hvide Trusts entered into a recapitalization agreement (the "Recapitalization
Agreement") in connection with the initial public offering of the Company's
Class A Common Stock. Under the Recapitalization Agreement, the Company agreed
to pay an annual advisory fee of $100,000 to the Investor Group, such amount to
be reduced by the compensation received by Messrs. Calhoun and Lee in their
capacities as directors of the Company. In 1998, $40,612 was paid to the
Investor Group pursuant to the Recapitalization Agreement.
<PAGE>
The investment banking firm of Donaldson, Lufkin & Jenrette Securities
Corporation, of which Mr. Low is a Managing Director, provided the Company with
investment banking services during 1998.
During the 1998 first quarter, J. Erik Hvide received advances
aggregating $80,000 against his 1997 annual bonus, which was paid in March 1998.
No interest was paid by Mr. Hvide on these advances.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
HVIDE MARINE INCORPORATED
By: /s/ JOHN H. BLANKLEY
John H. Blankley
Executive Vice President & Chief Financial Officer
