PROSPECTUS
June 6, 2000
Hvide Marine Incorporated
6,157,244 Shares of Common Stock
Class A warrants to Purchase 56,239 Shares of Common Stock
Noteholder warrants to Purchase 723,861 Shares of Common Stock
and
Shares Issued Upon Exercise of the Class A warrants and Noteholder warrants
The securities covered by this prospectus are being offered by selling
security holders.
Hvide Marine Incorporated ("Hvide Marine") emerged from Chapter 11
proceedings on December 15, 1999, and the selling security holders acquired
their common stock and warrants in connection with the consummation of our plan
of reorganization. We agreed to register these securities for resale by the
selling security holders.
The selling security holders will receive all of the net proceeds from
the sale of these securities and will pay any underwriting discounts and selling
commissions applicable to their sale.
The common stock and Class A warrants are traded on the
Over-the-Counter Bulletin Board under the symbols "HVDM" for the common stock
and "HVDMW" for the warrants. The noteholder warrants are not currently traded
on any market.
See "Risk Factors" beginning on page 4 for a discussion of risk factors
to be considered in connection with an investment in the common stock or
warrants.
These securities have not been approved or disapproved by the
Securities and Exchange Commission or any state securities commission nor has
the Securities and Exchange Commission or any state securities commission passed
upon the accuracy or adequacy of this prospectus. Any representation to the
contrary is a criminal offense.
Kansas and New Hampshire Residents: These securities may only be sold
to Kansas and New Hampshire residents having a net worth, exclusive of home,
furnishings and automobiles of $250,000 or net worth, exclusive of home,
furnishings and automobiles of $125,000 and taxable income of $50,000 or more.
<PAGE>
TABLE OF CONTENTS
Item Page
About this Prospectus...................................................3
Hvide Marine Incorporated...............................................3
Risk Factors............................................................4
Our Recent Bankruptcy and Reorganization...............................10
Description of Capital Stock...........................................13
Description of Class A Warrants........................................18
Description of Noteholder Warrants.....................................20
Selling Security Holders...............................................22
Plan of Distribution...................................................23
Experts................................................................26
Where You Can Find More Information....................................26
Documents Incorporated by Reference....................................26
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is a part of a registration statement that we have
filed with the SEC using a "shelf registration" process. You should read both
this prospectus and any supplement, together with the additional information
described under "Where You Can Find More Information."
You should rely only on the information provided or incorporated by
reference in this prospectus or any supplement. We have not authorized anyone
else to provide you with additional or different information. The common stock
and warrants are not being offered in any state where the offer is not
permitted. You should not assume that the information in this prospectus or any
supplement is accurate as of any date other than the date of such documents.
HVIDE MARINE INCORPORATED
We provide marine support and transportation services domestically and
internationally, primarily serving the energy and chemical industries. We have
been an active consolidator in each of the markets in which we operate,
increasing our fleet from 23 vessels in 1993 to 274 vessels at year-end 1999.
Our three principal markets are domestic and international offshore energy
support services, domestic offshore and harbor towing services, and
transportation of specialty chemicals and petroleum products in the U.S.
domestic trade. Our offshore energy support fleet provides services to operators
of offshore oil and gas exploration, development and production facilities in
the Gulf of Mexico, the Arabian Gulf, offshore West Africa and Southeast Asia.
We are the sole provider of commercial tug services at Port Everglades and Port
Canaveral, Florida, and a leading provider of those services in Tampa, Florida,
Mobile, Alabama, Lake Charles, Louisiana, and Port Arthur, Texas. Our domestic
transportation fleet includes five new double-hull chemical and petroleum
product carriers delivered in 1998 and 1999. Our principal offices are located
at 2200 Eller Drive, P.O. Box 13038, Fort Lauderdale, Florida 33316, and our
telephone number is (954) 524-4200.
On September 9, 1999, we filed a petition under chapter 11 of the U.S.
Bankruptcy Code. We emerged from bankruptcy proceedings when our plan of
reorganization became effective on December 15, 1999. For more information on
our bankruptcy and other recent developments, see "Our Recent Bankruptcy and
Reorganization."
<PAGE>
RISK FACTORS
In addition to the other information contained and incorporated by
reference in this prospectus, you should carefully consider the following risk
factors. These are the risks that we believe are material to our company and an
investment in our shares and warrants at this time.
Depressed industry conditions and substantial cash requirements have adversely
affected our earnings and liquidity and may cause us to violate a covenant in
our bank credit agreement.
Beginning in mid-1998, there was a severe downturn in offshore oil and
gas exploration, development and production activities in all markets in which
our offshore energy support fleet operates. This downturn, which was primarily a
result of a worldwide decline in oil and gas prices, resulted in a substantial
decline in vessel rates and utilization throughout our industry and adversely
affected our operating results. As a result, we have experienced substantial
declines in revenue, earnings before interest, taxes and depreciation, or
EBITDA, and net losses. Our offshore energy support business is not expected to
fully recover unless recent oil and gas price increases are sustained, leading
to upturns in exploration, development and production activities. Through the
first quarter of 2000, recent price increases have not led to an upturn in these
activities. If there is no significant increase in those activities, our
liquidity will continue to be adversely affected, and our cash flow from
operations and cash on hand will not be sufficient to satisfy our short-term
working capital needs, capital expenditures, debt service requirements and lease
and other payment obligations.
The actual sale or possibility of the sale of substantial amounts of our common
stock by the selling security holders could negatively affect the market price
of our common stock.
The shares of common stock offered by this prospectus, including the
shares issuable upon the exercise of the warrants, constitute more than 60% of
our outstanding common stock, most of which are beneficially owned by accounts
managed by one selling security holder. This prospectus has been prepared to
permit these holders to sell all of their common stock and warrants and the
common stock underlying the warrants from time to time, if they choose to do so,
without any volume or other limitations. Sales of substantial amounts of our
securities by these holders, or the possibility that substantial sales may
occur, could negatively affect prevailing market prices for our securities.
Our recent bankruptcy has adversely affected our ability to compete and is
likely to continue to do so.
We emerged from bankruptcy on December 15, 1999, the effective date of
our plan of reorganization. While we were in bankruptcy, the resulting adverse
publicity harmed our ability to attract new customers and to maintain favorable
relationships with our existing customers and suppliers. For example, some of
our suppliers required cash payments rather than extending credit, which
adversely affected our liquidity. We also experienced attrition of employees in
key functions. These trends may continue even though we are no longer in
bankruptcy. The marine transportation industry is highly competitive, and these
factors have had and are likely to continue to have an adverse effect on our
ability to compete.
We are highly leveraged, and our business may be harmed if we cannot maintain
our operating cash flow.
Although our plan of reorganization significantly reduced our debt, we
still have substantial debt and debt service requirements, in absolute terms and
in relation to stockholders' equity. Our ability to meet our debt service
obligations will depend on a number of factors, including our ability to
maintain operating cash flow. We cannot assure you that we will achieve our
targeted levels of operating cash flow. Our ability to maintain or increase
operating cash flow will depend upon improvement in industry conditions
discussed elsewhere in these risk factors, prevailing economic conditions and
other factors, many of which are beyond our control. Our inability to maintain
or increase our operating cash flow may have a material adverse effect on our
business and the market price of our securities.
Our business is substantially dependent on the oil and gas industry, which is
cyclical and is currently operating at reduced levels.
Our business and operations are substantially dependent upon conditions
in the oil and gas industry, particularly expenditures by oil and gas companies
for offshore exploration, development and production activities. These
expenditures, and hence the demand for offshore energy support and
transportation services, are directly influenced by oil and gas prices,
expectations concerning future prices, the cost of producing and delivering oil
and gas and government regulation and policies regarding exploration and
development of oil and gas reserves, including the ability of OPEC to set and
maintain production levels and prices. Since mid-1998, there has been a severe
downturn in the level of offshore exploration and production activity, which has
adversely affected the rates we receive for and the level of utilization of our
offshore energy support vessels. Offshore exploration and production
expenditures may not increase in the near future, and our business will not
recover until there is a significant increase in these expenditures. While oil
and gas prices have recently increased, the increases are not yet generally
believed to be sufficiently sustained to lead to upturns in offshore
exploration, development and production activities to their previous levels. We
cannot predict whether or when vessel utilization and rates will improve or the
extent of any improvement.
Excess vessel supply and vessel newbuilds have depressed day rates and adversely
affected our operating results and have caused any recovery in the offshore
energy support market to lag increases in oil and gas prices.
Our offshore energy support business is affected by the supply of and
demand for offshore energy support vessels. During periods when supply exceeds
demand there is significant downward pressure on the rates we can obtain for our
vessels. Because vessel operating costs cannot be significantly reduced, any
reduction in rates adversely affects our results of operations. Currently, the
industry supply of offshore energy support vessels significantly exceeds demand,
and this imbalance is expected to increase with the delivery of additional
vessels currently under construction or on order. Newbuilds generally have
substantially greater capability than older vessels, thereby exacerbating the
oversupply. In addition, because the supply of vessels currently exceeds demand,
we and other vessel operators have elected to defer drydocking and other
significant maintenance capital expenditures and have "cold stacked" vessels,
thereby creating an additional source of vessels if vessel demand increases.
Thus, before there is significant improvement in vessel day rates and
utilization, exploration and production activities will have to increase to
levels that will generate demand for the current excess supply, cold-stacked
vessels and the newbuilds that come into service.
We may be at a competitive disadvantage in responding to any improved demand in
the offshore energy support industry.
As a result of our need to reduce capital expenditures, we are
deferring required drydockings of a number of our offshore energy support
vessels that are laid up due to lack of demand. If and when increased demand
should provide employment opportunities for these vessels, we might not have the
capital resources with which to proceed with the required drydockings or to
proceed with them on as timely a basis as our competitors that have sufficient
resources. We also will be required to undertake the maintenance that has been
and will be deferred due to our program to reduce expenditures.
We conduct international operations, which involve additional risks.
We operate vessels worldwide. Operations outside the United States
involve additional risks, including the possibility of vessel seizure, foreign
taxation, political instability, foreign and domestic monetary and tax policies,
expropriation, nationalization, loss of contract rights, war and civil
disturbances and other risks that may limit or disrupt markets. Additionally,
our ability to compete in the international offshore energy support market may
be adversely affected by foreign government regulations that favor or require
the awarding of contracts to local persons, or that require foreign persons to
employ citizens of, or purchase supplies from, a particular jurisdiction.
Further, our foreign subsidiaries may face governmentally imposed restrictions
on their ability to transfer funds to their parent company.
Our offshore energy support fleet includes many older vessels.
The average age of our offshore energy support vessels, based on the
later of the date of construction or rebuilding, is approximately 18 years, and
approximately 31% of these vessels are more than 20 years old. We believe that
after a vessel has been in service for approximately 30 years, repair, vessel
certification and maintenance costs may not be economically justifiable. We may
not be able to maintain our fleet by extending the economic life of existing
vessels through major refurbishment or by acquiring new or used vessels.
Our business is subject to environmental risk and regulations.
Our operations are subject to federal, state, local and foreign laws
and regulations relating to safety and health and environmental protection,
including the generation, storage, handling, emission, transportation and
discharge of hazardous and non-hazardous materials. The trend in environmental
legislation and regulation is generally toward stricter standards, and this
trend will likely continue. If we fail to comply with these regulations, we
could face substantial liability for damages, remediation costs and penalties
associated with oil or hazardous-substance spills or other discharges into the
environment involving our vessel operations. Damages under these regulations are
defined broadly to include:
o natural resource damages and the costs of assessment;
o damages for injury to or losses resulting from destruction of property;
o net loss of taxes, royalties, rents, fees and profits by the U.S. federal,
state, local and foreign governments;
o lost profits from property or natural resource damage;
o the net costs of providing increased or additional public services
necessitated by a spill response, including protection from fire, safety or
other hazards; and
o the loss of subsistence use of natural resources.
Our shoreside operations are also subject to federal, state, local and
foreign environmental laws and regulations. In addition, tanker owners and
operators are required to establish and maintain evidence of financial
responsibility with respect to potential oil spill liability. We currently
satisfy this requirement through self-insurance or third-party insurance.
Amendments to existing laws and regulations or new laws and regulations may be
adopted that could limit our ability to do business or increase our cost of
doing business.
Our business involves hazardous activities and other risks of loss against which
we may not be adequately insured.
Our business is affected by a number of risks, including the mechanical
failure of our vessels, collisions, vessel loss or damage, cargo loss or damage,
hostilities and labor strikes. In addition, the operation of any vessel is
subject to the inherent possibility of a catastrophic marine disaster, including
oil, fuel or chemical spills and other environmental mishaps, as well as other
liabilities arising from owning and operating vessels. Any such event may result
in the loss of revenues and increased costs and other liabilities. Although our
losses from such hazards have not historically exceeded our insurance coverage,
there can be no assurance that this will continue to be the case.
The Oil Pollution Act of 1990, known as OPA 90, imposes virtually
unlimited liability upon vessel owners, operators and certain charterers for
certain oil pollution accidents in the United States. This has made liability
insurance more expensive and has also prompted insurers to consider reducing
available liability coverage. While we maintain insurance, there can be no
assurance that all risks are adequately insured against, particularly in light
of the liability imposed by OPA 90, and that any particular claim will be paid.
In addition, we may not be able to procure adequate insurance coverage at
commercially reasonable rates in the future. Because we maintain mutual
insurance, we are subject to funding requirements and coverage shortfalls in the
event claims exceed available funds and reinsurance, and to premium increases
based on prior loss experience. Any shortfalls could have a material adverse
effect on our financial condition.
We could lose Jones Act protection, which would result in additional competition
in the markets we serve.
A substantial portion of our operations is conducted in the U.S.
domestic trade. Under the U.S. coastwise laws, known as the Jones Act, this
trade is restricted to vessels built in the United States, owned and manned by
U.S. citizens and registered under U.S. law. There have been repeated attempts
to repeal the Jones Act, and these attempts are expected to continue in the
future. Repeal of the Jones Act would result in additional competition from
vessels built in lower-cost foreign shipyards and owned and manned by foreign
nationals accepting lower wages and benefits than U.S. citizens, which could
have a material adverse effect on our business.
Over time, we will have to remove some of our vessels from petroleum product
transport service in U.S. waters.
OPA 90 establishes a phase-out schedule, depending upon vessel size and
age, for single-hull vessels carrying crude oil and petroleum products. The
phase-out dates for our single-hull carriers are as follows: HMI Trader -- 2000,
Seabulk Magnachem -- 2007, HMI Defender -- 2008, HMI Dynachem -- 2011, HMI
Petrochem -- 2011 and Seabulk America -- 2015. The phase-out date for some of
our fuel barges is 2015. As a result of this requirement, these vessels will be
prohibited from transporting petroleum products in U.S. waters after their
phase-out dates. However, these vessels may be taken out of service for other
reasons prior to their OPA 90 phase-out dates. Although our remaining vessels
are not subject to mandatory retirement, and we employ what we believe to be a
satisfactory maintenance program for all our vessels, we may not be able to
maintain our fleet by extending the economic lives of existing vessels or
acquiring new or used vessels.
There are restrictions on foreign ownership of our stock, which could require a
non-U.S.-citizen investor to sell its stock to us.
In order to maintain our eligibility to operate vessels in the U.S.
domestic trade, 75% of our outstanding common stock is required to be held by
U.S. citizens. Although our certificate of incorporation contains provisions
limiting non-U.S.-citizen ownership of our capital stock, we could lose our
ability to conduct operations in the domestic trade if these provisions prove
unsuccessful in maintaining the required level of citizen ownership. Loss of
this ability would harm our business.
As a result of this limitation upon the non-U.S.-citizen ownership of
our common stock, any non-U.S.-citizen holder of our common stock may, to the
extent such ownership would cause 25% or more of our outstanding common stock to
be held by non-U.S.-citizens, be required to sell its common stock to us.
There is no established trading market for our equity securities.
Although our common stock was previously traded on the Nasdaq National
Market, Nasdaq halted trading of our shares when we initiated our chapter 11
reorganization. Our new common stock and warrants were issued as of December 15,
1999, the effective date of our plan of reorganization, and do not have an
established trading market. As a result, there may be little liquidity in the
market for these securities, market prices may not reflect their true value, and
market prices may change substantially in response to changes in the supply of
and demand for the securities.
The Class A warrants may expire before the market price of the common stock
exceeds their exercise price.
The market price of the common stock may never exceed the Class A
warrant exercise price of $38.49 per share before the Class A warrants expire on
December 14, 2003. As a result, a purchaser of the Class A warrants may never be
able to obtain value through the exercise of the warrants.
<PAGE>
We are authorized to issue preferred stock without stockholder approval, and the
preferential rights of preferred stock holders may be detrimental to the
interests of holders of common stock.
We are authorized to issue preferred stock without stockholder
approval. If we issue preferred stock, it may have dividend, liquidation and
voting rights senior to those of our common stock. As a result, the effects of
an issuance of preferred stock could include:
o reduction of the amount of cash otherwise available for payment of
dividends on our common stock;
o dilution of the voting power of our common stock if the preferred stock has
voting rights, and
o restriction of the rights of holders of our common stock to share in our
assets upon liquidation until satisfaction of any liquidation preference
granted to the holders of preferred stock.
In addition, so-called "blank check" preferred stock may be viewed as
having possible anti-takeover effects, if it were used to make a third party's
attempt to gain control of our company more difficult, time consuming or costly.
We have no current plans to issue preferred stock as an anti-takeover
device or otherwise, and our borrowing agreements restrict our ability to issue
preferred stock.
Our borrowing agreements contain covenants that restrict our activities.
Our borrowing agreements
o require us to meet various financial tests, including the maintenance of
minimum levels of earnings before interest, taxes, depreciation and
amortization (EBITDA) and of minimum ratios of leverage, debt service and
indebtedness to net worth;
o limit liens;
o limit additional borrowing;
o limit our ability to make investments;
o limit payments, including dividends on shares of any class of capital
stock; and
o limit our ability to do other things, such as entering into business
transactions, including mergers and acquisitions.
These provisions could limit our future ability to continue to pursue actions or
strategies that we believe would be beneficial to our company or our
stockholders.
Forward-Looking Statements
This prospectus and the information it incorporates by reference
include forward-looking statements. These are statements that address
activities, events or developments that we expect, project, believe or
anticipate will or may occur in the future. Examples include statements about
future rate levels for offshore energy support vessels, future capital
expenditures and investments in the acquisition and refurbishment of vessels,
repayment of debt, business strategies, future acquisitions, expansion and
growth of operations and other similar matters. These statements are based on
assumptions and analyses made by our management in light of its experience and
its perception of historical trends, current conditions, expected future
developments, and other factors it believes are appropriate in the
circumstances. These statements are subject to a number of assumptions, risks
and uncertainties, including the risk factors discussed in this prospectus,
general economic and business conditions, oil and gas prices, foreign exchange
and currency fluctuations, the business opportunities (or lack thereof) that may
be presented to and pursued by us, changes in laws or regulations and other
factors, many of which are beyond our control. We caution you that these
forward-looking statements are not guarantees of future performance and that
actual results or developments may differ materially from those we project.
OUR RECENT BANKRUPTCY AND REORGANIZATION
The events leading to the bankruptcy
Between 1997 and early 1999, we completed a number of acquisitions and
built new vessels that substantially expanded our offshore energy support
operations into several new international markets, increased the deepwater
capability of our offshore energy support fleet, and increased our domestic
offshore and harbor towing and petroleum product transportation operations. Our
principal sources of cash to finance these acquisitions were bank borrowings,
cash provided by operations, proceeds from two public offerings of common stock,
proceeds from an offering of $119.0 million of trust preferred securities and
proceeds from an offering of $300.0 million principal amount of senior notes.
The significant increase in our indebtedness incurred to finance these
acquisitions and newbuilds placed great demands on our capital resources
beginning in late 1997, when market forces brought about a precipitous decline
in our revenues.
The revenues of our offshore energy support fleet are dependent upon
the level of offshore oil and gas exploration, development and production
activities, which are in turn heavily dependent upon the prevailing price of
crude oil and natural gas. Beginning in late 1997 and continuing through 1998
and the first half of 1999, crude oil prices declined substantially, which
resulted in a severe downturn in these offshore activities, and in turn, in the
revenues of our offshore energy support operations. As a result of this decline
in revenues, we experienced a liquidity crisis beginning in mid-1998 and were
unable to comply with some of the financial covenants in our bank loan
agreement. Although the lending banks agreed to modifications of these
covenants, the continuing decline in our revenues caused us to be unable to
comply with the modified financial covenants at the end of the first quarter of
1999. As a consequence, our independent auditors' report on our 1998 financial
statements (issued at the end of March 1999) included an explanatory paragraph
stating that the reduction in revenues and noncompliance with the loan agreement
covenants raised substantial doubt about our ability to continue as a going
concern.
Our lending banks agreed to further waivers of our noncompliance with
covenants, which were accompanied by substantial fees and increases in interest
rates. Despite these waivers, adoption of a cash management program and
reduction in operating and overhead expenses during 1999, we were unable to make
a $12.5 million interest payment due August 16, 1999 on our $300.0 million of
senior notes. Discussions with an informal committee of holders of the senior
notes and our trust preferred securities led to our filing of a petition under
chapter 11 of the U.S. Bankruptcy Code on September 9, 1999.
<PAGE>
The reorganization
Under our reorganization plan, which became effective on December 15,
1999:
o the holders of the $300.0 million of senior notes received 9,800,000 shares
of our common stock in exchange for their notes;
o the holders of the $115.0 million of trust preferred securities received
200,000 shares of our common stock, as well as Class A warrants to purchase
an additional 125,000 shares, in exchange for those securities;
o stockholders received Class A warrants to purchase a total of 125,000
shares of our common stock;
o noteholder warrants to purchase 6.75% of our common stock on a fully
diluted basis after giving effect to the exercise of these warrants,
exercisable at a nominal purchase price for seven and one-half years, were
issued to purchasers of our new senior secured second notes described
below;
o claims of general and trade creditors were unaffected; and
o we reincorporated from Florida to Delaware.
The 9,800,000 shares received by the holders of the senior notes
represent 98.0% of our currently outstanding common stock and 89.3% of our
common stock on a fully diluted basis after assuming exercise of all the Class A
warrants and the noteholder warrants. The 200,000 shares received by holders of
the trust preferred securities represent 2.0% of our currently outstanding
common stock and 1.8% of our common stock on a fully diluted basis.
We also obtained new credit facilities from a group of financial
institutions. The new facilities, totaling $320.0 million, consist of $200.0
million in term loans, a $25.0 million revolving credit facility, and $95.0
million in aggregate principal amount at maturity of new 12 1/2% senior secured
notes due 2007. A portion of the proceeds from these facilities was used to
repay all outstanding borrowings under our prior bank loans and to pay
administrative and other fees and expenses. The balance of the proceeds will be
used for working capital and general corporate purposes. As discussed under
"--Recent Developments," we are required to obtain the consent of the lending
banks to borrow more than $17.5 million under the revolving credit facility.
The terms of the term loans and revolving credit facility are contained
in a credit agreement between us and the financial institutions. The credit
agreement provides for the following facilities:
Facility Amount Maturity
o A term loan $75 million 2004
o B term loan $30 million 2005
o C term loan $95 million 2006
o Revolving loan $25 million 2004
The interest rate for borrowings under the credit agreement is set from
time to time at our option, subject to certain conditions set forth in the
credit agreement, at either:
o the higher of the rate that the administrative agent announces from
time to time as its prime lending rate and 1/2 of 1% in excess of the
overnight federal funds rate, plus a margin ranging from 2.25% to 4.25%
or
o a rate based on a percentage of the administrative agent's quotation to
first-class banks in the New York interbank Eurodollar market for
dollar deposits, plus a margin ranging from 3.25% to 4.25%.
Borrowings under the credit agreement are secured by first priority
perfected security interests in substantially all of the equity of our
subsidiaries and by first priority perfected security interests in substantially
all of the vessels and other assets owned by us and our subsidiaries. In
addition, substantially all of our subsidiaries have guaranteed our obligations
under the credit agreement. The credit agreement contains customary covenants
that require us, among other things, to meet certain financial ratios and that
prohibit us from taking certain actions and entering into certain transactions.
The senior secured notes are our senior obligations and are secured by
a second priority lien on the assets that secure our borrowings under the credit
agreement. The notes are unconditionally guaranteed by all of our subsidiaries
that have guaranteed borrowings under the credit agreement. The notes were
issued at 90.0% of their face value for gross proceeds of $85.5 million. The
notes were issued under an indenture among us, the subsidiary guarantors and
financial institutions serving as trustee and collateral agent. The indenture
contains customary covenants that, among other things, restrict our ability to
incur additional debt, sell assets, and engage in mergers and transactions with
affiliates. The indenture provides that if the notes have not received a rating
better than Caa1 from Moody's and a rating better than CCC+ from Standard &
Poor's by April 15, 2000, the interest rate on the notes will increase to 13.5%
from the issue date, with the increase payable in additional notes. As of April
15, 2000, the notes had not been rated by Moody's or Standard & Poor's and,
accordingly, the additional interest became payable. The interest rate will be
reduced to 12.5% when the notes are rated better than Caa1 and CCC+. Although we
are currently seeking to obtain ratings for the notes, we may be unable to
obtain ratings that will reduce the interest rate to 12.5%. As consideration for
the purchase of the notes and as compensation for certain financial services, we
issued to the purchasers of the notes noteholder warrants to purchase 723,861
shares of our common stock at an exercise price of $.01 per share for a term of
seven and one-half years.
Recent Developments
Due to continuing weakness in day rates and utilization in the offshore
energy support business, as well as adverse market conditions in our towing and
transportation businesses, we anticipated that earnings would be lower than
expected in the first quarter of 2000. As a result, we were not in compliance
with certain covenants in our bank credit agreement as of March 31, 2000. We
have entered into an amendment to our credit agreement with the lending banks
under which the relevant covenants have been modified through March 31, 2001 and
we are required to prepay $60 million of the outstanding principal under the
term loans before January 1, 2001, of which $10 million must be paid before June
30, 2000 and $35 million must be paid before August 31, 2000. We intend to sell
vessels and other assets to obtain the funds with which to make these payments.
Some of these sales may be at less than book value. The amended credit agreement
further provides that, in the event we have not made the required principal
payments as scheduled or achieved certain target levels of EBITDA for the third
and fourth quarters of 2000, the lending banks may require us to sell additional
vessels, to be selected by the banks, with an aggregate fair market value of $35
million on a timetable specified by the banks. Additionally, we are required to
obtain the consent of the lending banks to borrow more than $17.5 million under
the revolving loan portion of the credit facility. We are required to pay a fee
of $4.5 million to the lending banks in connection with the amendment of the
credit agreement, payable in the form of a promissory note, accruing interest at
15% per annum, due the earlier of (i) April 2002 and (ii) the date on which the
ratio of funded indebtedness to EBITDA for any quarter is less than four to one.
DESCRIPTION OF CAPITAL STOCK
We are authorized to issue 20,000,000 shares of common stock, par value
$0.01 per share, and 5,000,000 shares of preferred stock, without par value. As
of April 1, 2000, 10,000,000 shares of common stock were issued and outstanding.
We have not issued any preferred stock.
Common Stock
Holders of our common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the stockholders, including
the election of directors. They do not have cumulative voting rights. Subject to
preferences that may be applicable to any outstanding series of preferred stock,
holders of our common stock are entitled to share ratably in any dividends that
may be declared by our Board of Directors out of legally available funds. Upon
any liquidation, dissolution or winding up of Hvide Marine, the holders of
common stock will be entitled to share ratably in the net assets legally
available for distribution to shareholders, in each case after payment of all of
our liabilities and subject to preferences that may be applicable to any series
of preferred stock then outstanding. Holders of common stock have no preemptive
or conversion rights or other rights to subscribe for additional shares. There
are no sinking fund provisions applicable to the common stock. Subject to
applicable law, we may, at the discretion of our Board, redeem shares of our
common stock if the provisions described under "-Limitation on Stock Ownership
by Non-U.S. Citizens" are not met. The rights, preferences and privileges of
holders of common stock are subject to the rights of the holders of shares of
any series of preferred stock that we may designate and issue in the future.
Preferred Stock
Our Board has the authority, without further action by the
stockholders, to issue from time to time shares of preferred stock in one or
more series. The Board may fix the number of shares, designations, preferences,
powers and other special rights of the preferred stock. The preferences, powers,
rights and restrictions of different series of preferred stock may differ. The
issuance of preferred stock could decrease the amount of earnings and assets
available for distribution to holders of common stock or affect adversely the
rights and powers, including voting rights, of the holders of common stock. The
issuance may also have the effect of discouraging, delaying or preventing a
change in control of Hvide Marine, regardless of whether the transaction may be
beneficial to stockholders. We have no current plans to issue any shares of
preferred stock.
Delaware Law and Certain Charter and By-law Provisions
Section 203 of the General Corporation Law of Delaware (the "GCL"), an
antitakeover law, prohibits a publicly held Delaware corporation from engaging
in a "business combination" with an "interested stockholder" for a period of
three years after the date of the transaction in which the person became an
interested stockholder. There are several exceptions that permit an interested
stockholder to engage in a business combination, including if prior to the date
the stockholder became an interested stockholder the Board approves either the
business combination or the interested stockholder transaction, or if the
business combination is approved by our Board and authorized by a vote of at
least 66 2/3% of the outstanding voting stock of the corporation not owned by
the interested stockholder. A "business combination" includes mergers, asset
sales and other transactions resulting in a financial benefit to the interested
stockholder. Subject to some exceptions, an "interested stockholder" is a person
who, together with affiliates and associates, owns, or within three years did
own, 15% or more of the corporation's voting stock.
Our certificate of incorporation and by-laws provide for the division
of our Board into three classes as nearly equal in size as possible with
staggered three-year terms. Any vacancy on the Board, however occurring,
including a vacancy resulting from an enlargement of the Board, may be filled
only by vote of a majority of the directors then in office. The classification
of our Board and the limitation on the filling of vacancies could have the
effect of making it more difficult for a third party to acquire, or of
discouraging a third party from acquiring, control of Hvide Marine.
Our certificate of incorporation prohibits the issuance of nonvoting
equity securities. However, preferred stock having the right, voting separately
as a class, to elect any directors if and when dividends payable on shares of
preferred stock have been in arrears and unpaid for a specified period of time
will not be deemed nonvoting equity securities.
Limitation of Liability
Our certificate of incorporation contains a provision eliminating, to
the fullest extent permitted by the GCL, directors' personal liability to Hvide
Marine and to its stockholders for monetary damages for breaches of fiduciary
duty. By virtue of this provision, under the GCL, a director will not be
personally liable for monetary damages for a breach of his or her fiduciary
duty, except for liability arising out of:
o a breach of duty of loyalty to Hvide Marine or to its stockholders,
o acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law,
o dividends or stock repurchases or redemptions that are unlawful under
Delaware law, or
o any transaction from which the director receives an improper personal
benefit.
This provision pertains only to breaches of duty by directors as directors and
not in any other corporate capacity, such as officers.
Our certificate of incorporation also provides that Hvide Marine shall,
to the fullest extent permitted by the GCL, indemnify each director, officer,
employee or agent against, and hold each director, officer, employee or agent
harmless from, certain expenses, liabilities, and losses, including attorneys'
fees. These expenses, liabilities, and losses are those reasonably incurred in
connection with a proceeding brought against the director or officer by reason
of the fact that he or she was a director, officer, employee or agent of Hvide
Marine or was serving at our request as a director, officer, employee or agent
of another entity. Under this provision, we are required to advance all
reasonable costs incurred in defending any such proceeding to the fullest extent
permitted by Delaware law.
Limitation on Stock Ownership by Non-U.S. Citizens
Our certificate of incorporation:
o contains provisions limiting the aggregate percentage ownership by non-U.S.
citizens (as defined below) of each class of our capital stock to 24.99% of
the outstanding shares of each class to ensure that such foreign ownership
will not exceed the maximum percentage of 25.0% permitted by federal law,
o requires a dual stock certificate system to help determine non-U.S.-citizen
ownership, and
o permits the Board to make determinations reasonably necessary to ascertain
such ownership and implement the limitations.
These provisions are intended to protect our ability to operate our
vessels in the U.S. domestic trade governed by the Jones Act, and to assure
continuous compliance with the citizenship requirements of the Merchant Marine
Act, 1936, as amended, and the Shipping Act, 1916, as amended, and the
regulations promulgated thereunder.
Under our dual stock certificate system, certificates representing
shares of our common stock bear legends that designate the certificates as
either "citizen" or "non-citizen," depending on the citizenship of the owner. We
may also issue non-certificated shares through depositories if we determine that
the depositories have established procedures that allow us to monitor the
ownership of our common stock by non-U.S. citizens.
For purposes of the dual stock certificate system, a "non-citizen" is
defined as any person other than a citizen, and a "citizen" is defined as:
any individual who is a citizen of the U.S. by birth, naturalization, or as
otherwise authorized by law;
any corporation
o organized under the laws of the U.S., or a state, territory, district,
political subdivision or possession thereof (each, a "state"),
o of which title to not less than 75% of each class or series of its stock is
beneficially owned by and vested in citizens, free from any trust or
fiduciary obligation in favor of non-U.S. citizens,
o of which not less than 75% of the voting power is vested in citizens, free
from any contract or understanding through which voting power may be
exercised directly or indirectly on behalf of non-U.S. citizens,
o of which there are no other means by which control is conferred upon or
permitted to be exercised by non-U.S. citizens,
o whose president, chief executive officer, chairman of the board and all
officers authorized to act in their absence or disability, are citizens,
and
o of which more than 50% of the number of its directors necessary to
constitute a quorum are citizens;
any partnership,
o organized under the laws of the U.S. or a state of the U.S.,
o all general partners of which are citizens, and
o of which not less than a 75% interest is beneficially owned and controlled
by, and vested in, citizens, free and clear of any trust or fiduciary
obligation in favor of non-U.S. citizens;
any association
o organized under the laws of the U.S. or a state of the U.S.,
o of which 100% of the members are citizens,
o whose president, chief executive officer, or equivalent position, chairman
of the board, or equivalent committee or body, and all persons authorized
to act in their absence or disability, are citizens,
o of which not less than 75% of the voting power is beneficially owned by
citizens, free and clear of any trust or fiduciary obligation in favor of
non-U.S. citizens, and
o of which more than 50% of that number of its directors or equivalent
persons necessary to constitute a quorum are citizens;
any limited liability company
o organized under the laws of the U.S. or a state of the U.S.,
o of which not less than 75% of the members are citizens, and the remaining
members are persons meeting the requirements of 46 U.S.C.ss.12102(a),
o of which not less than 75% of the voting power is vested in citizens, free
and clear of any trust or fiduciary obligation in favor of any non-U.S.
citizen,
o whose president or other chief executive officer or equivalent position,
chairman of the board or equivalent committee or body, managing members (or
equivalent), if any, and all persons authorized to act in their absence or
disability are citizens and
o of which more than 50% of the number of its directors or equivalent persons
necessary to constitute a quorum are citizens;
o any joint venture, if not an association, corporation, partnership, or
limited liability company,
o organized under the laws of the U.S. or a state of the U.S., and
o 100% of the members are, or of which 100% of the equity is beneficially
owned and vested in citizens, free and clear of any trust or fiduciary
obligation in favor of any non-U.S. citizens; and
any trust
o domiciled in and existing under the laws of the U.S. or a state of the
U.S.,
o all of the trustees of which are citizens,
o of which not less than a 75% interest is held for the benefit of citizens,
free and clear of any trust or fiduciary obligation in favor or any
non-U.S. citizens and
o each beneficiary of which with an enforceable interest in the trust is a
citizen.
This definition is applicable at all tiers of ownership and in both form and
substance at each tier of ownership.
Shares of our common stock are transferable to citizens at any time and
are transferable to non-U.S. citizens if, at the time of the transfer, the
transfer would not increase the aggregate ownership by non-U.S. citizens of our
common stock above 24.99% of the total outstanding shares. Any purported
transfer to non-U.S. citizens of shares in excess of 24.99% of the outstanding
shares will be ineffective as against us for all purposes, including voting,
dividends, and other distributions. In addition, the shares may not be
transferred on our books and we may refuse to recognize the holder as a
stockholder, except to the extent necessary to effect any remedy available to
us. Subject to these limitations, upon surrender of any stock certificate for
transfer, the transferee will receive citizen (blue) certificates or non-U.S.
citizen (red) certificates.
Our certificate of incorporation establishes procedures for the
transfer of shares to enforce the limitations described above. Under the
procedures, before a stock certificate is issued or transferred, the recipient
or transferee of the shares must provide a certificate providing information
about their citizenship. If the recipient or transferee is acting as a fiduciary
or nominee for a beneficial owner, the beneficial owner must provide the
certificate. The issuance or transfer will be denied upon refusal to furnish the
citizenship certificate. Furthermore, as part of the dual stock certificate
system, depositories holding shares of our common stock will be required to
maintain separate accounts for citizen and non-U.S. citizen shares. When the
beneficial ownership of shares is transferred, the depositories' participants
will be required to advise the depositories as to the account in which the
transferred shares should be held. In addition, to the extent necessary to
enable us to determine the number of shares owned by non-U.S. citizens, we may
require record holders and beneficial owners of shares of common stock to
confirm their citizenship status and may temporarily withhold dividends payable
to, and deny voting rights to, any such record holder or beneficial owner until
confirmation of citizenship is received.
Should we become aware that the ownership by non-U.S. citizens of our
common stock at any time exceeds 24.99% of our outstanding shares we may
temporarily withhold dividends and other distributions on and to deny voting
rights with respect to the excess shares. We may withhold dividends and
distributions and deny voting rights pending the transfer of the excess shares
such shares to a citizen or the reduction in the percentage of shares owned by
non-U.S. citizens to below 25.0%. If we withhold dividends and distributions, we
will set them aside for the account of the excess shares. Once the excess shares
are transferred to a citizen or the aggregate ownership of shares by non-U.S.
citizens is less than 25.0%, we will pay the dividends to the then record
holders of the related shares. So long as the excess exists, excess shares will
not be deemed to be outstanding for purposes of determining the vote required on
any matter brought before the stockholders for a vote. Our Board has the power
to determine which shares of common stock constitute the excess shares. The
determination will be made by reference to the date or dates on which the shares
were purchased by non-U.S. citizens, starting with the most recent acquisitions
of shares by a non-U.S. citizen and including, in reverse chronological order,
all other acquisitions of shares by non-U.S. citizens from and after the
acquisition that first caused the percentage of shares owned by non-U.S.
citizens to exceed 24.99%. The excess shares resulting from a determination that
a record holder or beneficial owner is no longer a citizen will be deemed to
have been acquired as of the date of such determination.
We may redeem excess shares in order to reduce the aggregate ownership
by non-U.S. citizens to 24.99%. As long as our common stock is not authorized
for listing on a national securities exchange or for quotation on the Nasdaq
National Market, the redemption price will be the average of the bid and asked
prices furnished by any Nasdaq member firm that makes a market for the 30
trading days preceding the date of determination. If it is so listed, the
redemption price will be the average of the closing sale price of the shares
during the 30 trading days preceding the date of determination. The redemption
price for excess shares will be payable in cash.
In addition to implementing these procedures, our Board may take other
ministerial actions or interpret our foreign ownership policy as it deems
necessary in order to implement the policy.
The above statements and descriptions concerning our certificate of
incorporation and by-laws summarize what we believe to be the material
information in those documents, which have been filed as exhibits to the
registration statement of which this prospectus is part. For information on
obtaining copies of those documents, see "Where You Can Find More Information."
DESCRIPTION OF CLASS A WARRANTS
The Class A warrants are subject to a warrant agreement between us and
State Street Bank and Trust Company as warrant agent, pursuant to which we
issued 250,000 Class A warrants. The following description summarizes what we
believe to be the material provisions of the Class A warrant agreement. For more
information, refer to the Class A warrant agreement, which is an exhibit to the
registration statement of which this prospectus is part. For information on
obtaining a copy of the Class A warrant agreement, see "Where You Can Find More
Information."
General
Each Class A warrant entitles the holder to purchase one share of our
common stock at an exercise price of $38.49. The exercise price and the number
of shares of common stock issuable upon the exercise of the Class A warrants are
both subject to adjustment in certain cases described below. The Class A
warrants are exercisable at any time prior to 5:00 p.m. on December 14, 2003,
when all unexercised warrants will automatically expire.
The Class A warrants may be exercised by surrendering to the warrant
agent the warrant certificates, together with the accompanying form of election
to purchase and an application for purchase of common stock (or equivalent form
with citizenship information). No Class A warrant may be exercised if such
exercise causes ownership of our common stock by non-U.S. citizens to exceed the
limit set by applicable law or our certificate of incorporation. These must be
properly completed and executed and delivered with payment of the Class A
exercise price. Payment of the Class A exercise price may be made in the form of
cash or a certified or official bank check, payable to the order of Hvide Marine
Incorporated. Upon surrender of the warrant certificates and payment of the
Class A exercise price, the warrant agent will notify us, and we will deliver to
or upon the written order of the holder, stock certificates representing the
number of whole shares of common stock or other property to which the holder is
entitled, including any cash payment to adjust for fractional interests in
shares issuable upon exercise. If fewer than all of the Class A warrants
evidenced by a Class A warrant certificate are exercised, a new Class A warrant
certificate will be issued for the remaining number of Class A warrants.
We will not be required to, but may at our option, issue fractional
shares of common stock on the exercise of Class A warrants. If more than one
Class A warrant is presented for exercise in full at the same time by the same
holder, the number of full shares issuable upon such exercise will be computed
on the basis of the aggregate number of shares issuable on exercise of the Class
A warrants so presented. If any fraction of a share would be issuable on the
exercise of any Class A warrant, and we elect not to issue such fractional
shares, we will direct the transfer agent to pay cash equal to the then current
market price per share multiplied by the fraction computed to the nearest whole
cent.
Certificates for Class A warrants will be issued in registered form
only, and no service charge will be made for registration for transfer or
exchange upon surrender of any warrant certificate at the office of the warrant
agent maintained for that purpose. We may require payment of a sum sufficient to
cover any tax or other governmental charge imposed in connection with
registration for transfer or exchange of warrant certificates.
The holders of the Class A warrants do not have the rights of
stockholders, including the right to vote on matters submitted to our
stockholders and the right to receive cash dividends. The holders of the Class A
warrants are not entitled to share in our assets in the event of the
liquidation, dissolution or winding up of our company's affairs.
Adjustments
The number of shares issuable upon the exercise of the Class A warrants
and the Class A exercise price both are subject to adjustment in certain events.
These events include our
o subdividing our outstanding shares of common stock,
o combining our outstanding shares of common stock into a smaller number of
shares, or
o issuing by reclassification of our shares of common stock any shares of our
capital stock.
The Class A exercise price in effect and the number of shares issuable
upon exercise of each Class A warrant immediately prior to these actions will be
adjusted so that the holder of any Class A warrant will be entitled to receive
the number of shares of our capital stock it would have owned immediately
following the action had it exercised their Class A warrants immediately prior
to the action.
In case of certain consolidations or mergers of our company, or the
sale of all or substantially all of its assets, each Class A warrant will be
exercisable for the right to receive the kind and amount of shares of stock or
other securities or property to which the holder would have been entitled as a
result of the consolidation, merger or sale had it exercised their Class A
warrants immediately prior to the transaction.
Reservation of Shares
We have authorized and reserved for issuance the number of shares of
our common stock that will be issuable upon the exercise of all outstanding
Class A warrants. These shares of common stock, when paid for and issued, will
be duly and validly issued, fully paid and non-assessable, free of preemptive
rights and free from all taxes, liens, charges and security interests.
Amendment
We and the warrant agent may amend or supplement the warrant agreement
for various purposes without consent of the holders of the Class A warrants.
These include curing defects or inconsistencies or making changes that do not
materially adversely affect the rights of any holder. Any amendment or
supplement to the warrant agreement that has a material adverse effect on the
interests of the holders of the Class A warrants requires the written consent of
the holders of a majority of the then outstanding Class A warrants. The consent
of each holder of the Class A warrants affected is required for any amendment
increasing the Class A exercise price or decreasing the number of shares
issuable upon exercise of the Class A warrants, except for adjustments provided
for in the warrant agreement as described above.
DESCRIPTION OF NOTEHOLDER WARRANTS
The noteholder warrants are subject to a warrant agreement between us
and State Street Bank and Trust Company, as warrant agent, pursuant to which we
issued 723,861 noteholder warrants. The following description summarizes what we
believe to be the material provisions of the noteholder warrant agreement. For
more information, refer to the noteholder warrant agreement, which is an exhibit
to the registration statement of which this prospectus is part. For information
on obtaining a copy of the noteholder warrant agreement, see "Where You Can Find
More Information."
General
Each noteholder warrant entitles the holder to purchase one share of
our common stock at an exercise price of $.01 or pursuant to the cashless
exercise provision in the noteholder warrant agreement. The exercise price and
the number of shares of common stock issuable upon the exercise of the
noteholder warrants are both subject to adjustment in certain cases described
below. The noteholder warrants are exercisable at any time prior to 5:00 p.m. on
June 30, 2007, when all unexercised warrants will automatically expire.
The noteholder warrants may be exercised by surrendering to the warrant
agent the warrant certificates, together with the accompanying form of election
to purchase and Application for Purchase of Common Stock (or equivalent form
with citizenship information). These must be properly completed and executed and
delivered with payment of the noteholder exercise price. Payment of the
noteholder exercise price may be made in the form of cash or a certified or
official bank check, payable to the order of Hvide Marine Incorporated. Upon
surrender of the warrant certificates and payment of the noteholder exercise
price, the warrant agent will deliver to or upon the written order of the holder
stock certificates representing the number of whole shares of common stock or
other property to which the holder is entitled, including any cash payment to
adjust for fractional interests in shares issuable upon exercise. If less than
all of the noteholder warrants evidenced by a noteholder warrant certificate are
exercised, a new noteholder warrant certificate will be issued for the remaining
number of noteholder warrants.
We will not issue fractional shares on the exercise of noteholder
warrants. If more than one noteholder warrant is presented for exercise in full
at the same time by the same holder, the number of full shares issuable upon
such exercise will be computed on the basis of the aggregate number of shares
issuable on exercise of the noteholder warrants so presented. If any fraction of
a share would be issuable on the exercise of any noteholder warrant, we will
direct the transfer agent to pay cash equal to the excess of the value (as
determined by our Board in good faith) of a warrant share over the exercise
price on the day before the warrant is exercised, multiplied by the fraction.
Certificates for noteholder warrants will be issued in registered form
only, and no service charge will be made for registration for transfer or
exchange upon surrender of any warrant certificate at the office of the warrant
agent maintained for that purpose. We may require payment of a sum sufficient to
cover any tax imposed in connection with registration for transfer or exchange
of warrant certificates.
The holders of the noteholder warrants do not have the rights of
stockholders, including the right to vote on matters submitted to our
stockholders and the right to receive cash dividends. The holders of the
noteholder warants are not entitled to share in our assets in the event of the
liquidation, dissolution or winding up of our company's affairs.
Adjustments
The number of shares issuable upon the exercise of the noteholder
warrants and the exercise price both are subject to adjustment in certain
events. These events include our
o paying a dividend or making a distribution on our common stock in shares of
any class of our capital stock,
o subdividing our outstanding shares of common stock,
o combining our outstanding shares of common stock into a smaller number of
shares, or
o issuing by reclassification of our shares of common stock any shares of our
capital stock.
The noteholder exercise price in effect and the number of shares
issuable upon exercise of each noteholder warrant immediately prior to these
actions will be adjusted so that the holder of any noteholder warrant will be
entitled to receive the number of shares of our capital stock it would have
owned immediately following the action had it exercised their noteholder
warrants immediately prior to the action.
In addition, we will adjust the number of shares issuable upon the
exercise of the noteholder warrants and/or the exercise price if we issue or
sell common stock or certain rights, options or warrants for the purchase of
common stock or if we make certain distributions (including any evidence of
indebtedness or assets).
In case of certain consolidations or mergers of our company, or the
sale of all or substantially all of its assets, each noteholder warrant will be
exercisable for the right to receive the kind and amount of shares of stock or
other securities or property to which the holder would have been entitled as a
result of the consolidation, merger or sale had it exercised their noteholder
warrants immediately prior to the transaction.
Reservation of Shares
We have authorized and reserved for issuance the number of shares of
our common stock that will be issuable upon the exercise of all outstanding
noteholder warrants. These shares of common stock, when paid for and issued,
will be duly and validly issued, fully paid and non-assessable, free of
preemptive rights and free from all taxes, liens, charges and security
interests.
Amendment
We and the warrant agent may amend or supplement the warrant agreement
for certain purposes without consent of the holders of the noteholder warrants.
These include curing defects or inconsistencies or making changes that do not
materially adversely affect the rights of any holder. Any amendment or
supplement to the warrant agreement that has a material adverse effect on the
interests of the holders of the noteholder warrants requires the written consent
of the holders of a majority of the then outstanding noteholder warrants. The
consent of each holder of the noteholder warrants affected is required for any
amendment increasing the exercise price or decreasing the number of shares
issuable upon exercise of the noteholder warrants, except for adjustments
provided for in the noteholder warrant agreement as described above.
Registration Rights
We have granted holders of our noteholder warrants various registration
rights. If at any time we propose or are required to register common equity
securities under the Securities Act, holders of our noteholder warrants have the
right to cause us to use our reasonable best efforts, following a customary
notice and response period, to register the common stock underlying their
warrants with our registration statement. In addition, we have agreed to effect
a registration statement on up to two occasions upon demand by warrant holders
owning at least 20% of the noteholder warrants.
SELLING SECURITY HOLDERS
The following table sets forth information with respect to the selling
security holders whose shares and warrants are covered by this prospectus. To
the extent the selling security holders' security ownership is represented by
Class A warrants or noteholder warrants, the table sets forth the shares of
common stock issuable upon exercise of the warrants. The information provided in
the table below is based in part on information provided to us by the selling
security holders as of April 28, 2000. We calculated beneficial ownership
according to Rule 13d-3 of the Exchange Act as of this date. We may update,
amend or supplement this prospectus from time to time to update the disclosure
in this section.
The securities included in this table do not represent all of the
securities covered by the registration statement of which this prospectus is
part. Additional selling security holders will be added to the table by
amendment or prospectus supplement before they sell their securities.
The selling security holders may from time to time offer and sell any
or all of their equity securities that are covered by this prospectus. Because
the selling security holders are not obligated to sell their securities, and
because the selling security holders may also acquire our publicly traded equity
securities, we cannot estimate how many equity securities the selling security
holders will beneficially own after this offering. If the selling security
holders sell all of the securities registered under this prospectus and does not
acquire any other of our securities, they will no longer own any of our equity
securities.
Shares of Common Stock
Beneficially Owned Before Offering
Name Number Percent
Entities affiliated with 6,157,244 2 60.3% 3
Loomis, Sayles &
Company, L.P. 1
One Financial Center
Boston, MA 02111
CoMac Partners, L.P. 12,700 *
CoMac International, N.V. 7,337 *
CoMac Endowment Fund. 8,184 *
Master Fund, Ltd. 33,865 *
New Energy Corporation 33,242 *
Great American Life Insurance Co. 60,501 *
Great American Insurance Co. 33,907 *
American Empire Surplus Lines
Ins. Co. 6,649 *
American National Fire Ins. Cc. 6,649 *
Worldwide Insurance Co. 6,649 *
Stonewall Insurance Co. 6,649 *
Tennenbaum and Co., LLC 53,580 *
Fernwood Associates, L.P. 13,546 *
Fernwood Restructurings, Ltd. 19,303 *
Fernwood Foundation Fund 1,016 *
George McFadden. 10,163 *
John McFadden. 10,163 *
Alexander B. McFadden.
Deceased, Mellon Bank
N/A, Alexander Cushing
and George McFadden
trustees u/w 20,324 *
--------------
* Less than 1.0%
(1) An officer of Loomis, Sayles & Company, L.P. ("Loomis") was
appointed to the creditors' committee that represented our
creditors in conjunction with the development our plan of
reorganization under chapter 11 of the U.S. bankruptcy code.
The effective date of the plan was December 15, 1999. As of
the effective date, Loomis is no longer a member of any
creditors' committee relating to us and disclaims any present
intent to change or influence control of our management.
(2) Based on the Schedule 13D/A filed jointly on March 15, 2000 by
Loomis and its general partner, Loomis, Sayles & Company, Inc.
and on clerical adjustments and account terminations between
March 15, 2000 and April 28, 2000. Loomis holds these
securities on behalf of a number of managed accounts, two of
which beneficially own more than 5% of the issued and
outstanding common stock of the Company. Loomis has full
discretion to manage each of these accounts through advisory
agreements. Includes 56,239 shares issuable upon the exercise
of Loomis's Class A warrants and 155,366 shares issuable upon
exercise of Loomis's noteholder warrants (assuming that no
anti-dilution or other adjustments are required on or before
the date of exercise) that were exercisable within 60 days of
the date hereof.
(3) The percentages are calculated on the basis of the number of
shares of common stock outstanding as of April 1, 2000, plus
shares of common stock underlying outstanding warrants
exercisable within 60 days hereof.
The selling security holders received the shares of common stock and
the Class A warrants in connection with our plan of reorganization in respect of
securities held before the reorganization. They received the noteholder warrants
in connection with the acquisition of our 12 1/2% senior secured notes due 2007.
In connection with our plan of reorganization, we entered into a
registration rights agreement in which we agreed to file a registration
statement on an appropriate form under the Securities Act with respect to
certain of the equity securities offered hereby and to use our best efforts to
cause the registration statement to be declared effective and to keep it
continuously effective, subject to customary limitations, so as to permit or
facilitate the sale or distribution of these securities. In addition, the
selling security holders may make unlimited demands on us for registration under
the Securities Act and have customary "piggyback" registration rights to include
their equity securities in other registration statements we file. We have agreed
to pay expenses in connection with the performance of the obligations to effect
these registrations other than underwriting fees, discounts, commissions or
other similar selling expenses. We have also agreed to indemnify the selling
security holders against certain liabilities, including liabilities under the
Securities Act.
PLAN OF DISTRIBUTION
Who may sell and applicable restrictions
We will not receive any of the proceeds from the sale of securities
offered hereby. The selling security holders will be offering and selling all
securities offered and sold under this prospectus. The selling security holders
may from time to time offer the securities through brokers, dealers or agents
that may receive compensation in the form of discounts, concessions or
commissions from the selling security holders and/or the purchasers of the
securities for whom they may act as agent. In effecting sales, broker-dealers
that are engaged by the selling security holders may arrange for other
broker-dealers to participate. The selling security holders and any brokers,
dealers or agents who participate in the distribution of the securities may be
deemed to be underwriters, and any profits on the sale of the securities by them
and any discounts, commissions or concessions received by any broker, dealer or
agent may be deemed to be underwriting discounts and commissions under the
Securities Act. To the extent the selling security holders may be deemed to be
underwriters, they may be subject to statutory liabilities, including
liabilities under sections 11, 12 and 17 of the Securities Act and Rule 10b-5
under the Exchange Act.
Manner of sales
The selling security holders will act independently of us in making
decisions with respect to the timing, manner and size of each sale. Sales of our
equity securities may be made over the over-the-counter market. The securities
may be sold at prevailing market prices, at prices related to prevailing market
prices or at negotiated prices. The selling security holders may also resell all
or a portion of the securities in open market transactions in reliance upon Rule
144 under the Securities Act, provided that the securities meet the criteria and
conform to the requirements of that rule. The selling security holders may
decide not to sell any of the securities offered under this prospectus, and they
may transfer, devise or gift these securities by other means.
The securities may be sold according to one or more of the following
methods:
o a block trade in which the broker or dealer so engaged will attempt to sell
the securities as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by the broker or
dealer for its account;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
o an exchange distribution under the rules of the exchange;
o transactions in the over-the-counter market;
o face-to-face transactions between sellers and purchasers without a
broker-dealer;
o by writing options;
o through underwriters or dealers who may receive compensation in the form of
underwriting discounts, concessions or commissions;
o the pledge of the securities as security for any loan or obligation; and
o a combination of any of the above transactions.
Some persons participating in this offering may engage in transactions
that stabilize, maintain or otherwise affect the price of the securities,
including the entry of stabilizing bids or syndicate covering transactions or
the imposition of penalty bids. The selling security holders and any other
person participating in a distribution will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder, including
Regulation M. This regulation may limit the timing of purchases and sales of any
of the securities by the selling security holder and any other person. The
anti-manipulation rules under the Exchange Act may apply to sales of securities
in the market and to the activities of the selling security holders and their
affiliates. Furthermore, Regulation M may restrict the ability of any person
engaged in the distribution of the securities to engage in market-making
activities with respect to the particular securities being distributed for a
period of up to five business days before the distribution. All of the foregoing
may affect the marketability of the securities and the ability of any person or
entity to engage in market-making activities with respect to the securities.
Hedging and other transactions with broker-dealers
In connection with distributions of the securities, the selling
security holder may enter into hedging transactions with broker-dealers. In
connection with these transactions, broker-dealers may engage in short sales of
the registered securities in the course of hedging the positions they assume
with selling security holders. A "short sale" or "selling short" involves the
sale of a security that the selling security holder has borrowed. The selling
security holders may purchase identical securities in the market at a later date
for redelivery to the lender. The selling security holders may also enter into
option or other transactions with broker-dealers which require the delivery to
the broker-dealer of the registered securities. The broker-dealer may then
resell or transfer these securities under this prospectus. The selling security
holders may also loan or pledge the registered securities to a broker-dealer and
the broker-dealer may sell the securities so loaned or, upon a default, the
broker-dealer may effect sales of the pledged securities under this prospectus.
Prospectus delivery
Because the selling security holders may be deemed to be an underwriter
within the meaning of Section 2(11) of the Securities Act, they will be subject
to the prospectus delivery requirements of the Securities Act. At any time a
particular offer of the securities is made, a revised prospectus or prospectus
supplement, if required, will be distributed which will set forth:
o the name of the selling security holders and of any participating
underwriters, broker-dealers or agents;
o the aggregate amount and type of securities being offered;
o the price at which the securities were sold and other material terms of the
offering;
o any discounts, commissions, concessions and other items constituting
compensation from the selling security holders and any discounts,
commissions or concessions allowed or reallowed or paid to dealers; and
o that the participating broker-dealers did not conduct any investigation to
verify the information in this prospectus or incorporated in this
prospectus by reference.
The prospectus supplement or a post-effective amendment will be filed with the
SEC to reflect the disclosure of additional information with respect to the
distribution of the securities.
Expenses associated with registration
We have agreed to pay the expenses of registering the securities under
the Securities Act, including registration and filing fees, printing and
duplication expenses, administrative expenses and legal and accounting fees. The
selling security holders will pay their own brokerage fees, if any.
Suspension of this offering
We may suspend the use of this prospectus if we learn of any event that
causes this prospectus to include an untrue statement of a material fact or omit
to state a material fact required to be stated in the prospectus or necessary to
make the statements in the prospectus not misleading in the light of the
circumstances then existing. If this type of event occurs, a prospectus
supplement or revised prospectus, if required, will be distributed to the
selling security holders.
Indemnification
Pursuant to a registration rights agreement we entered into with the
selling security holders in connection with the initial offer and sale of the
securities by the selling security holders, we have agreed to indemnify the
selling security holders against certain liabilities, including liabilities
under the Securities Act.
EXPERTS
Ernst & Young LLP, independent certified public accountants, have
audited our consolidated financial statements included in our Annual Report on
Form 10-K for the year ended December 31, 1999, as amended on Form 10-K/A, as
set forth in their report, which is incorporated by reference in this prospectus
and elsewhere in the registration statement. Our financial statements are
incorporated by reference in reliance on Ernst & Young LLP's report, given on
their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file with the SEC annual, quarterly and current reports, proxy
statements and other information required by the Securities Exchange Act of
1934, as amended. You may read and copy any document we file at the SEC's public
reference rooms located at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, at Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and at Seven World Trade Center, Suite 1300, New York,
New York 10048. Please call the SEC at 1-800-SEC-0330 for further information on
the public reference rooms. Copies of such material can be obtained by mail from
the Public Reference Section of the SEC at 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549 at prescribed rates. Our filings with the SEC are
also available to the public on the SEC's Internet web site at
http://www.sec.gov.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file with the
SEC later will automatically update and supersede this information. The
following documents filed by us are incorporated by reference in this
prospectus:
o our annual report on Form 10-K, including any amendments thereto, for the
latest fiscal year for which such a report has been filed,
o our quarterly reports on Form 10-Q and current reports on Form 8-K filed
since the end of the latest fiscal year for which we have filed an annual
report on Form 10-K, and
o any future filings or amendments to filings incorporated by reference in
this prospectus made by us with the SEC under sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act prior to the termination of the
offering
You may request a copy of these and any future filings, at no cost, by
writing or telephoning us at:
Hvide Marine Incorporated
2200 Eller Drive
P.O. Box 13038
Ft. Lauderdale, Florida 33316
(954) 524-4200
Attention: Investor Relations
