SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3 )*
Midcoast Energy Resources Inc.
(Successor to Nugget Oil Corporation)
(Name of Issuer)
Common Stock
(Title of Class of Securities)
59563W104
(CUSIP Number)
Robert G. Reedy, 700 Louisiana, 35th Floor, Houston,Texas 77002 (713)226-0600
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
August 14, 1996
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box.
Check the following box if a fee is being paid with the statement . (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to "filed" for the purpose of Section 18 of the Securities Exchange Act
of 1934 ("Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
CUSIP No. 59563W 10 4
Page 2 of 6 Pages
1
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Stevens G. Herbst
###-##-####
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b)
3
SEC USE ONLY
4
SOURCE OF FUNDS*
00
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
or 2(e)
6
CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
0
8
SHARED VOTING POWER
0
9
SOLE DISPOSITIVE POWER
285,902
10
SHARED DISPOSITIVE POWER
0
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING POWER
285,902
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.4%
14
TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
Stevens G. Herbst
Item 1. Security and Issuer.
This statement relates to the common stock, $.01 par value per share (the
"Common Stock") of Midcoast Energy Resources, Inc., a Nevada corporation (the
"Issuer"). The principal executive offices of the Issuer are located at 1100
Louisiana, Suite 2950, Houston, Texas 77002.
Item 2. Identity and Background.
(a) This statement is being filed by Stevens G. Herbst ("Mr. Herbst").
(b) The business address of Mr. Herbst is 710 Buffalo, Suite 800, Corpus
Christi, Texas 78401.
(c) Mr. Herbst's principal business activity has been carried on as
President, Director and fifty-percent (50%) owner of TexLine Gas Company
("TexLine"), Texas corporation and as President and Director of Rainbow
Investments Company, a Texas Corporation ("Rainbow"). TexLine's and Rainbow's
business activities involve the natural gas pipeline industry. TexLine's and
Rainbow's principal address is the same address set forth in subparagraph (b)
above. Mr. Herbst holds approximately eleven percent (11%) of the Common Stock
of the Issuer and served as Executive Vice President and a Director of the
Issuer from 1992 to 1996 and as a director of Nugget Oil Corporation ("Nugget"),
predecessor of the Issuer and a Minnesota corporation, from 1990 to 1992.
(d) During the last five (5) years, Mr. Herbst has not been convicted in
a criminal proceeding.
(e) During the last five (5) years, Mr. Herbst has not been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction, which resulted in his being subject to a judgment, decree or final
order enjoining future violation of or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
(f) Mr. Herbst is a citizen of the United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
On September 15, 1992, pursuant to the Plan of Reorganization of Nugget,
as approved by the United States Bankruptcy Court for the Southern District of
Texas, Corpus Christi Division (the "Bankruptcy Court"), Nugget was merged with
and into the Issuer (the "Nugget Merger"). The Common Stock was deemed
registered with the Securities and Exchange Commission (the ("SEC") under
Section 12g of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), in accordance with Rule 12g-3(a) as a result of the Nugget
Merger and the Issuer's filing of a Form 8-K with the SEC on September 24,
1992. In connection with the Offering (herein after defined) the Issuer filed
a Form 8-A registering its Common Stock under Section 12(b) of the Exchange Act.
An explanation of the Plan of Reorganization is presented in this Item 3 of the
Second Amended Schedule 13D dated October 30, 1993 (attached hereto as
Exhibit 99).
Pursuant to such Plan of Reorganization (the "Plan") and the other
transactions ordered by the Bankruptcy Court in connection therewith, Mr. Herbst
became the owner of record of 63,090 shares of Common Stock. Additionally, Mr.
Herbst became the owner of record of 50,000 shares of the Preferred Stock.
On August 5, 1996, the Issuer effected a 4.460961 for 1 split in the
Issuer's Common Stock. This stock split increased Mr. Herbst's ownership to
285,902 shares of Common Stock, but had no dilutive effect on his percentage
ownership.
Item 4. Purpose of Transaction.
On August 14, 1996, the Issuer closed an underwritten public offering of
1,000,000 shares of Common Stock ("the Offering"), which reduced Mr. Herbst's
percentage ownership of the Issuer to 11.4%. One of the transactions
contemplated in connection with the Offering was the Issuer's elimination of the
entire class of Preferred Stock. Accordingly, on May 21, 1996, pursuant to
Board and majority stockholder approval, the Issuer redeemed all 50,000 shares
of the Preferred Stock owned by Mr. Herbst, as well as all other shares of
Preferred Stock owned by other stockholders to enable the Issuer to eliminate
the entire class of Preferred Stock. The elimination of the Preferred Stock
was accomplished on July 26, 1996 through an amendment to the Issuer's articles
of incorporation.
Mr. Herbst acquired a majority of the securities of the Issuer owned by him
or benefically pursuant to the Plan referred to in Item 3. Except as set forth
in the Issuer's registration statement on Form SB-2 (No. 333-4643) as filed with
the SEC in connection with the Offering, neither Rainbow nor Mr. Herbst has
any present plan or proposal, or any knowledge of any plan or proposal, which
relates to or would result in any of the actions set forth in parts (a) through
(j) of Item 4 of Schedule 13D. Mr.Herbst or Rainbow may from time to time and
at any time reconsider any or all of the activities which may result in any of
the actions set forth in such Item 4.
Item 5. Interest in Securities of the Issuer.
(a) Mr. Herbst is the owner of 285,902 shares of Common Stock
(approximately 11.4% of the outstanding shares of Common Stock) as of the date
hereof.
(b) Pursuant to the Voting Proxy Agreement described in Item 6 hereof,
Texas Commerce Bank National Association ("TCB") has the sole power to vote all
285,902 shares of the Common Stock for five (5) years subsequent to the August
5, 1996. However, it should be noted that no person other than Mr. Herbst has
the right to receive or the power to direct the receipt of dividends from, or
the proceeds from the sale of, such shares of Common Stock.
(c) Except as described herein, Mr. Herbst has not engaged in any
transaction in the Common Stock of the Issuer during the past 60 days except as
set forth in this Schedule 13D.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to the Securities of the Issuer.
Another transaction that was entered into in connection with the Offering
was the termination of the Shareholder Agreement to which Mr. Herbst was a
party. Accordingly, on May 13, 1996, the Issuer, Magic Gas Corp. (f/k/a Midcoast
Natural Gas, Inc.), Mr. Herbst and Mr. Kenneth B. Holmes, Jr. ("Mr. Holmes")
terminated a Shareholder Agreement between said parties dated November 16, 1992.
The Termination Agreement is attached hereto as Exhibit A.
On August 5, 1996, in connection with the Offering and the Issuer's listing
of Common Stock on the American Stock Exchange, the Issuer, TCB, Mr. Herbst, and
Mr. Holmes, together with all spouses of the designated individual shareholders,
entered into a Voting Proxy Agreement which designates TCB to vote by proxy all
stock owned beneficially and of record by Messrs. Herbst and Holmes for a period
of five years. The Voting Proxy Agreement was entered into for the sole purpose
of satisfying a condition to listing the Issuer's Common Stock on the American
Stock Exchange. The Voting Proxy Agreement is attached hereto as Exhibit B.
Except as described herein or in the Voting Proxy Agreement (attached
hereto as Exhibit B), there are no other contracts, arrangements,
under-standings or relationships (legal or otherwise) between Mr. Herbst and any
other person with respect to any securities of the Issuer.
Item 7. Material to Be Filed as Exhibits.
Exhibit A. Termination Agreement, dated May 13, 1996, by and among
Midcoast Energy Resources, Inc., Magic Gas Corp., Stevens G.
Herbst and Kenneth B. Holmes, Jr.
Exhibit B. Voting Proxy Agreement, dated August 5, 1996, by and among
Midcoast Energy Resources, Inc., Stevens G. Herbst, June
Herbst, Kenneth B. Holmes, Jr., Dorothy S. Holmes, Rainbow
Investments Company, and Texas Commerce Bank National
Association.
Exhibit 99. Second Amended Schedule 13D for Stevens G. Herbst dated
October 30, 1993.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
DATED: August 27, 1996.
/S/ Stevens G. Herbst
Stevens G. Herbst
A:\S083855.04
TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT is entered into on this 13th day of May 1996
by, between and among Midcoast Energy Resources, Inc., a Nevada corporation
(the "Company"), and Magic Gas Corp., a Texas corporation, (f/k/a Midcoast
Natural Gas, Inc.), Stevens G. Herbst and Kenneth B. Holmes, Jr.
(collectively the "Shareholders" and individually, a "Shareholder"), together
with all spouses of individual Shareholders designated on signature pages
hereto.
W I T N E S S E T H:
WHEREAS, the Shareholders and the Company are parties to that certain
Shareholder Agreement, dated November 16, 1992 between the Shareholders and
the Company (the "Shareholder Agreement");
WHEREAS, pursuant to Section VII of the Shareholder Agreement, the
Shareholder Agreement shall terminate upon an executed written agreement among
the Company and the Shareholders which terminates the Shareholder Agreement;
and
WHEREAS, the parties hereto desire to terminate the Shareholder Agreement
on the date hereof.
NOW, THEREFORE, for and in consideration of the premises, and the mutual
and dependent promises contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the
parties hereto, intending to be legally bound, hereby agree as follows:
The Shareholder Agreement be, and it hereby is, in all respects
terminated
on the date hereof without further action hereby from the Company or the
Shareholders, and the Company and the Shareholders acknowledge and agree that
they have no further rights or remedies thereunder.
IN WITNESS WHEREOF, this Termination Agreement is executed and delivered
on and as of the day first above written.
MIDCOAST ENERGY RESOURCES, INC.
By:/s/ DAN C. TUTCHER
Dan C. Tutcher, President
MAGIC GAS CORP.
(f/k/a Midcoast Natural Gas, Inc.)
By:/s/ DAN C. TUTCHER
Dan C. Tutcher, President
/s/ STEVENS G. HERBST
Stevens G. Herbst
/s/ JUNE HERBST
June Herbst, Spouse
Address: 5018 Cascade Drive
Corpus Christi, Texas 78413
/s/ KENNETH B. HOLMES, JR.
Kenneth B. Holmes, Jr.
/s/ DOROTHY C. HOLMES
Dorothy C. Holmes, Spouse
Address: 5201 N.W. Trail
Corpus Christi, Texas 78401
/s/ DAN C. TUTCHER
Dan C. Tutcher
/s/ KIMBERLY TUTCHER
Kimberly Tutcher, Spouse
Address: 2207 Twin Oaks
Kemah, Texas 77565
VOTING/PROXY AGREEMENT
This Voting/Proxy Agreement (the "Agreement") is made this 5th day of
August 1996, by and among Midcoast Energy Resources, Inc., a Nevada corporation
(the "Company"), Stevens G. Herbst ("Mr. Herbst"), June Herbst, Kenneth B.
Holmes, Jr. ("Mr. Holmes"), Dorothy C. Holmes and Rainbow Investments Company,
a Texas corporation owned by Mr. Herbst ("Rainbow"), and Texas Commerce Bank
National Association, a national banking association, as Proxy Holder (as
hereinafter defined).
Whereas, the Stockholders (as hereinafter defined) own Shares (as
hereinafter defined) of the capital stock of the Company in the number and class
set forth below their signatures to this Agreement.
Now, therefore, the Stockholders hereby enter into this Agreement solely
to satisfy a condition to listing the Company's Common Stock (as hereinafter
defined) on the American Stock Exchange, Inc. ("AMEX") as follows:
1.1 Definitions. As used in this Agreement the following terms have the
meanings set forth below:
"Affiliate" shall mean any person or entity that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, or is acting as agent on behalf of, the Stockholders or is
an employee, officer or director of Rainbow or the Company, including but not
limited to immediate family relations and stockholders who own of record or
beneficially five percent (5%) or more of the issued and outstanding Common
Stock.
"Board" shall mean the Board of Directors of the Company.
"Common Stock" shall mean shares of the Company's common stock $.01, par
value per share.
"Company" shall mean Midcoast Energy Resources, Inc., and shall include any
and all successors to all or substantially all of the assets and business of
Midcoast Energy Resources, Inc.
"Parties to this Agreement" shall mean any party hereto or his successor
in interest.
"Proxy" shall mean the proxy to vote the shares granted by Stockholders to
the Proxy Holder hereby.
"Proxy Holder" shall mean Texas Commerce Bank, a national banking
association, whose principal offices are in Houston, Harris County, Texas.
"Public Shares" shall mean all shares of Common Stock which are held of
record and beneficially by stockholders who are not officers, directors or
Affiliates of the Company or the Stockholders.
"Stockholders" shall mean Herbst, Holmes, Rainbow, and June Herbst and
Dorothy C. Holmes, joining herein to the extent of their community property
interest, if any.
"Shares" shall mean, at any given time, all of the issued and outstanding
shares of Common Stock now owned or hereafter acquired by the Stockholders and
any security issued by the Company which is convertible into or exercisable for
shares of Common Stock of the Company. When used with reference to a number of
Shares, "Shares" shall mean, in addition to the number of outstanding shares of
Common Stock of the Company, the number of shares of Common Stock of the Company
issuable upon conversion or exercise of other issued and outstanding securities
of the Company which are convertible into or exercisable for shares of Common
Stock of the Company owned or hereafter acquired by the Stockholders. All
references to Shares owned by an individual Stockholder include the community
interest, if any, of the spouse of that Stockholder.
"Transfer" shall mean any direct or indirect sale, assignment, gift,
devise, pledge, hypothecation or other encumbrance, or any other disposition of
any of the Shares, either voluntarily or by operation of law.
1.2 Creation; Notice of Effectiveness; Termination of the Proxy.
The Stockholders each hereby appoint the Proxy Holder as their true and
lawful attorney, agent and proxy to vote all of the Shares at all meetings
called for a vote by the stockholders of the Company, or to execute consents
as a stockholder of the Company. Texas Commerce Bank National Association is
hereby appointed as Proxy Holder for the purposes set forth in and with the
powers granted by this Agreement, and hereby accepts such appointment and agrees
to act as Proxy Holder hereunder. This Proxy is coupled with an interest and is
irrevocable, subject to the terms set forth below, for a period of five (5)
years after such date that this Agreement becomes effective. The Proxy Holder
shall be present, in person or represented by proxy, at all annual and special
meetings of stockholders of the Company so that all Common Stock may be counted
for the purposes of determining the presence of a quorum at such meetings. The
Proxy Holder shall be entitled and it shall be its duty to exercise any and all
voting rights in respect of the Common Stock either in person or by proxy or
consent, but only as hereinafter provided, unless otherwise directed by an
order of any governmental authority or a court of competent jurisdiction.
In exercising its voting rights in accordance with this Section 1.2, the Proxy
Holder shall take such actions at all annual, special or other meetings of
stockholders of the Company or in connection with any action by consent in lieu
of a meeting. The Stockholders agree, and the Proxy Holder acknowledges, that
the Proxy Holder shall not participate in or interfere with the management of
the Company and shall take no other actions with respect to the Company except
in accordance with the terms hereof. The Proxy Holder shall vote all shares of
the Common Stock of the stockholders on all matters, including without
limitation the election or removal of directors, voted on by the stockholders of
the Company (whether at a regular, special meeting or pursuant to a unanimous
written consent) in the same proportion in which the Public Shares are voted
with respect to such matters.
The Proxy hereby created shall terminate (i) upon the delisting of the
Company's Shares from AMEX; (ii) at such time when Holmes and Herbst own of
record or beneficially less than one-half of one percent (1/2%) of the issued
and outstanding shares of Common Stock; (iii) as to any individual, at such
time when any Stockholder owns no Shares, of record or beneficially; or (iv)
in the event of a dissolution or liquidation of the Company, a sale of all or
substantially all of the Company's assets, or merger or consolidation involving
the Company in which the Company is not the surviving corporation where the
holders of Shares receive securities of another corporation and/or other
property for the exchange of such Shares. It is also hereby provided that the
Shares may be sold by Stockholders free of the Proxy and this Agreement,
including but not limited to a Transfer to the Company, except in the event of
a Transfer to an Affiliate, in which case the Affiliate shall continue to be
subject to the duration and terms of this Agreement.
Upon the death or legal incapacitation of a Stockholder, all Shares
registered in the name of such Stockholder on the records of the Company shall
be transferred to that Stockholder's estate free of the Proxy and this
Agreement.
1.3 Restrictive Legend.
All certificates representing the Shares will bear a restrictive legend
referencing this Agreement and the Proxy, which restrictive legend will be
removed by the Company at the request of the Stockholders upon termination of
the Proxy pursuant to the terms hereof.
1.4 Powers and Rights Not Granted to the Proxy Holder.
The Proxy Holder does not have the right or authority to sell or otherwise
dispose of any of the Shares or the right to receive any dividends or
distributions on the Shares in stock, cash, kind or otherwise, all of which
rights are retained by the Stockholders.
1.5 Administration of Proxy.
The Stockholders will promptly forward to the Proxy Holder all notices of
stockholder meetings, proxy statements, consent solicitations and any other
materials or information received by them relating to any action to be taken by
the stockholders of the Company. The Proxy Holder shall not be responsible for
the taking of any action under this Agreement unless it receives notice, in the
manner herein provided, of the matter with respect to which it is to act. In
the absence of any such notice, the Proxy Holder shall be entitled to presume
that no action on its part is required.
If the Proxy Holder is unable to serve as such for any reason, a successor
Proxy Holder shall be designated by the Stockholders and shall fill such
vacancies only in the event that all Parties to this Agreement and
representatives at AMEX are in agreement. In the event of failure of the
Stockholders, AMEX or Parties to this Agreement to agree upon a mutually
acceptable successor Proxy Holder, any Party to this Agreement may apply to an
appropriate court for the appointment of a successor Proxy Holder. Successor
Proxy Holder shall enjoy all the rights, powers, interests and immunities of the
Proxy Holder originally acting hereunder.
This Agreement is to be governed by the laws of the State of Texas. The
Proxy Holder is authorized to construe this Agreement and his reasonable
construction made in good faith shall be conclusive and binding upon the
Stockholders, except for the construction of the definition of Affiliate, in
which case his reasonable construction made in good faith shall only be
conclusive and binding upon the Stockholders after the Proxy Holder has
consulted with AMEX on such construction and AMEX and the Proxy Holder are in
agreement as to the construction of the definition of Affiliate. The Proxy
Holder may seek the advice of legal counsel as agreed to by Messrs. Herbst and
Holmes, which counsel may also be counsel for the Company, and any action taken
in good faith in accordance with the opinion of such counsel shall be conclusive
upon the Parties to this Agreement and the Proxy Holder shall not be liable
to the Parties to this Agreement on account of such action.
The Proxy Holder is authorized to incur and pay those reasonable expenses
and charges which he deems necessary to the administration of this Agreement,
including, but not limited to, necessary fees and charges for the services of
legal counsel. The Proxy Holder shall not be required to give any bond or other
security for the discharge of his duties under this Agreement. The Proxy Holder
shall be entitled to reasonable compensation for his services as Proxy Holder,
as attached hereto as Exhibit A, and to reimbursement for reasonable expenses
and charges incurred in the administration of the Agreement, which compensation
and reimbursement shall be paid by the Company.
1.6 Indemnification.
The Company hereby indemnifies Proxy Holder against, and holds Proxy Holder
harmless from, any and all expenses, including, without limitation, attorneys'
fees and court costs, costs, damages and claims, including, but not limited to,
costs of investigation, litigation and arbitration, in connection with or
arising from or out of this Agreement, except such acts of omissions as may
result from the willful misconduct or gross negligence of such Proxy Holder.
IT IS THE EXPRESS INTENT OF THE COMPANY TO INDEMNIFY THE PROXY HOLDER FOR, AND
HOLD IT HARMLESS AGAINST, ITS OWN NEGLIGENT ACTS OR OMISSIONS.
1.7 Scope of Undertaking.
Proxy Holder's duties and responsibilities in connection with this
greement shall be limited to those expressly set forth in this Agreement.
Proxy Holder shall not be liable for any error in judgment, any act or omission,
any mistake of law or fact, or for anything it may do or refrain from doing in
connection herewith, except for, subject to Section 1.8 hereinbelow, its own
willful misconduct or gross negligence. It is the intention of the Parties to
this Agreement that Proxy Holder shall never be required to use, advance or risk
its own funds or otherwise incur financial liability in the performance of any
of its duties or the exercise of any of its rights and powers hereunder.
1.8 Reliance; Liability.
Proxy Holder may rely on, and shall not be liable for acting or refraining
from acting in accordance with, any written notice, instruction or request or
other paper furnished to it hereunder or pursuant hereto and believed by it to
have been signed or presented by the proper party or parties. Proxy Holder
shall have no liability for any loss arising from any cause beyond its control,
including, but not limited to, the following: (a) the act, failure or neglect
of the Company or any agent or correspondent or any other person selected by
Proxy Holder; (b) any delay, error, omission or default of any mail, courier,
telegraph, cable or wireless agency or operator; or (c) the acts or edicts of
any government or governmental agency or other group exercising governmental
powers. Proxy Holder is not responsible or liable in any manner whatsoever for
the sufficiency, correctness, genuineness or validity of the subject matter
presented to it by the Stockholders or the Company, pursuant to the notices to
be provided to the Proxy Holder by the Company and the Stockholders, pursuant
to Section 1.5, or any Party to this Agreement or the form or execution hereof
or for the identity or authority of any person executing this Agreement or any
Party to this Agreement.
1.9 Right of Interpleader.
Should any controversy arise involving the Parties to this Agreement or any
of them or any other person, firm or entity with respect to this Agreement, or
if Proxy Holder should be in doubt as to what action to take, Proxy Holder shall
have the right, but not the obligation, to institute a petition for interpleader
in any court of competent jurisdiction to determine the rights of the Parties to
this Agreement. In the event Proxy Holder is a party to any dispute, Proxy
Holder shall have the additional right to refer such controversy to binding
arbitration. Should a petition for interpleader be instituted, or should Proxy
Holder be threatened with litigation or become involved in litigation or binding
arbitration in any manner whatsoever in connection with this Agreement, the
Company hereby agrees to reimburse Proxy Holder for its attorneys' fees and any
and all other expenses, losses, costs and damages incurred by Proxy Holder in
connection with or resulting from such threatened or actual litigation or
arbitration prior to any disbursement hereunder.
2.1 Titles and Subtitles.
Titles of the paragraphs and subparagraphs are placed herein for convenient
reference only and shall not to any extent have the effect of modifying,
amending or changing the express terms and provisions of this Agreement.
2.2 Words and Gender or Number.
As used herein, unless the context clearly indicates the contrary, the
singular number shall include the plural, the plural the singular, and the use
of any gender shall be applicable to all genders.
2.3 Execution in Counterpart.
This Agreement may be executed in any number of counterparts, each of which
shall be taken to be an original.
2.4 Severability.
In the event any parts of this Agreement are found to be void, the
remaining provisions of this Agreement shall nevertheless be binding with the
same effect as though the void parts were deleted.
2.5 Waiver.
No waiver of any provisions of this Agreement shall be valid unless in
writing and signed by the person or party against whom charged.
2.6 Applicable Law.
This Agreement shall be subject to and governed by the laws of the State
of Texas.
2.7 Assignment.
This Agreement shall be binding upon and inure to the benefit of the
Parties to this Agreement and their respective heirs, legal representatives,
executors, administrators, successors and assigns.
2.8 Notices.
Any notice or other communication required or permitted to be given under
this Agreement by any Party to this Agreement to any other Party to this
Agreement shall be considered as property given if in writing and (a) delivered
against receipt therefor, (b) mailed by registered or certified mail, return
receipt requested and postage prepaid or (c) sent by telefax machine, in each
case to the address or telefax number, as the case may be, set forth below each
signatory.
Except to the extent otherwise provided in the Agreement, delivery of any
communication given in accordance herewith shall be effective only upon actual
receipt thereof by the party or parties to whom such communication is directed.
Any Party to this Agreement may change the address to which communications
hereunder are to be directed by giving written notice to the other Parties to
this Agreement in the manner provided in this section.
2.9 Resignation.
Proxy Holder may resign hereunder upon ten (10) days prior notice to the
Stockholders, at which time Proxy Holder's obligations hereunder shall cease and
terminate. If the Stockholders fail to designate a successor Proxy Holder
within ten (10) days after the giving of such notice, Proxy Holder may institute
a petition for interpleader.
[Signature Pages to Follow]
IN WITNESS WHEREOF, each of the Parties to this Agreement has executed this
Agreement on this 5th day of August 1996.
MIDCOAST ENERGY RESOURCES, INC.,
a Nevada Corporation
By: /s/ DAN C. TUTCHER
Name: Dan C. Tutcher
Title: President
Address: 1100 Louisiana, Suite 2950
Houston, TX 77002
Telephone No.: (713) 650-8900
Telecopy No.: (713) 650-3232
STOCKHOLDERS:
/s/ STEVENS G. HERBST
Stevens G. Herbst
/s/ JUNE HERBST
June Herbst, Spouse
Address: 5018 Cascade
Corpus Christi, TX 78413
Telephone No.: (512) 991-3914
Telecopy No.: (512) 882-9210
/s/ KENNETH B. HOLMES, JR.
Kenneth B. Holmes, Jr.
/s/ DOROTHY C. HOLMES
Dorothy C. Holmes, Spouse
Address: 5201 N.W. Trail
Corpus Christi, TX 78410
Telephone No.: (512) 241-2139
Telecopy No.: (512) 882-9210
RAINBOW INVESTMENTS COMPANY, a Texas
corporation
By: /s/ STEVENS G. HERBST
Name: Stevens G. Herbst
Title: President
Proxy Holder:
By:/s/ MONA RODGERS
Texas Commerce Bank National
Association, a national banking
association
Address: 600 Travis Street, 11th Floor
Houston, TX 77002
Attn: Mona Rodgers
Corporate Trust/Escrow Section
Telephone No.: (713) 216-4644
Telecopy No.: (713) 216-5476
Stockholders
Number of
Shares Owned
1. Stevens G. Herbst 281,442 Shares
2. Kenneth B. Holmes, Jr. 283,195 Shares
3. Rainbow Investments Company 4,460 Shares
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2 )*
Midcoast Energy Resources, Inc.(Successor to Nugget Oil Corporation)
(Name of Issuer)
Common Stock
(Title of Class of Securities)
59563W104
(CUSIP Number)
Linda M. Robison, 1021 Main Street, Suite 1300, Houston,
Texas 77002 (713) 754-5220
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
September 15, 1993
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box.
Check the following box if a fee is being paid with the statement. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934
("Act") or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
SCHEDULE 13D
CUSIP No. 59563W 10 4
Page 2 of 11 Pages
1
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Stevens G. Herbst
###-##-####
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b)
3
SEC USE ONLY
4
SOURCE OF FUNDS*
00
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
or 2(e)
6
CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
63,090
8
SHARED VOTING POWER
200,503
9
SOLE DISPOSITIVE POWER
63,090
10
SHARED DISPOSITIVE POWER
201,503
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING POWER
263,593 (includes 200,503 shares for which beneficial ownership is disclaimed
pursuant to Rule 13d-4)
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
86%
14
TYPE OF REPORTING PERSON*
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
SCHEDULE 13D
Stevens G. Herbst
Item 1. Security and Issuer.
This statement relates to the common stock, $.01 par value per share (the
"Common Stock") of Midcoast Energy Resources, Inc., a Nevada corporation (the
"Issuer"). The principal executive offices of the Issuer are located at 1100
Louisiana, Suite 3030, Houston, Texas 77002.
Item 2. Identity and Background.
(a) This statement is being filed by Stevens G. Herbst.
(b) The business address of Mr. Herbst is 710 Buffalo, Suite 800, Corpus
Christi, Texas 78401.
(c) Mr. Herbst's principal business activity has been carried on as
president, director and fifty percent (50%) owner of TexLine Gas Company, a
privately owned Texas business corporation involved in the natural gas pipeline
industry ("TexLine"), the principal address of which is the same as that set
forth in subparagraph (b) above. Mr. Herbst also serves as executive vice
president and a director of the Issuer and previously served as a director of
Nugget Oil Corporation, a Minnesota corporation and a predecessor of the Issuer
("Nugget").
(d) During the last five (5) years, Mr. Herbst has not been convicted in
a criminal proceeding.
(e) During the last five (5) years, Mr. Herbst has not been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction, which resulted in his being subject to a judgment, decree or final
order enjoining future violation of or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
(f) Mr. Herbst is a citizen of the United States of America.
Because of the execution of a Shareholder Agreement, dated November 16,
1992 (the "Shareholder Agreement"), by and among the Issuer, Mr. Herbst, Kenneth
B. Holmes, Jr. and Midcoast Natural Gas Inc. ("Natural"), Mr. Holmes, Mr. Herbst
and Natural may be deemed to be members of a "group" within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as amended. (The material
terms of the Shareholder Agreement are set forth in Item 6 hereof.) Therefore,
the requisite information with respect to Mr. Holmes and Natural is also
included in this filing by Mr. Herbst.
Mr. Holmes' business address is also 710 Buffalo, Suite 800, Corpus
Christi, Texas 78401 and Mr. Holmes' principal business activity has been
carried on as Vice President, Director and 50% owner of TexLine. Mr. Holmes
also serves as Vice President, Treasurer and a Director of the Issuer and
previously served as a Director of Nugget.
Natural is engaged primarily in the ownership of natural gas transmission
and distribution facilities. The principal business and office address of
Natural is 1100 Louisiana, Suite 3030, Houston, Texas 77002. All of the
outstanding capital stock of Natural is owned by Dan C. Tutcher and Kimberly
Tutcher, as Husband and Wife. Dan C. Tutcher and Kimberly Tutcher are the sole
directors of Natural. Dan C. Tutcher is the President and Kimberly Tutcher is
the Vice President of Natural. The principal occupation of Dan C. Tutcher is
serving as President of the Issuer and a director. Mr. Tutcher also previously
served as a director of Nugget. Kimberly Tutcher is employed as a flight
attendant with Southwest Airlines, Inc., Dallas, Texas.
To the knowledge of Mr. Herbst, neither Mr. Holmes, Natural, Dan C. Tutcher
nor Kimberly Tutcher has been, during the last five (5) years (a) convicted in
a criminal proceeding or (b) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction, which resulted in any of such
persons being subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
Each of Kenneth B. Holmes, Jr., Dan C. Tutcher and Kimberly Tutcher is a
citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
On September 15, 1992, pursuant to the Plan of Reorganization of Nugget,
as approved by the United States Bankruptcy Court for the Southern District of
Texas, Corpus Christi Division (the "Bankruptcy Court"), Nugget was merged with
and into the Issuer (the "Nugget Merger"). The Common Stock has been deemed
registered with the Securities and Exchange Commission (the "SEC") under Section
12g of the Securities Act of 1934, as amended, in accordance with Rule 12g-3(a)
as a result of the Nugget Merger and the Issuer's filing of its Current Report
on Form 8-K with the SEC on September 24, 1992.
Pursuant to such Plan of Reorganization (the "Plan") and the other
transactions ordered by the Bankruptcy Court in connection therewith, at
September 15, 1993, there were 306,255 shares of Common Stock and 200,000 shares
of the Issuer's 5% Cumulative Preferred stock, $1.00 par value per share (the
"Midcoast Preferred Stock") outstanding. 137,020 shares of Common Stock are
owned by Natural; and 63,090 shares are owned by Mr. Herbst and 63,483 shares
are owned by Mr. Holmes. Additionally, Natural owns 100,000 shares of Midcoast
Preferred Stock and Messrs. Herbst and Holmes, each own 50,000 shares of
Midcoast Preferred Stock. (See Item 6 below).
The Plan, among other things, authorized the consummation of a Reverse
Stock Split (herein so called) of Nugget's common stock, $.10 par value per
share (the "Nugget Common Stock"), and provided that (A) each holder of Nugget
Common Stock whose aggregate shares of Nugget Common Stock held in one name or
account are fewer than 750 received cash for the fractional share interest
resulting from such reclassification in an amount equal to the product of $.001
times the number of shares of Nugget Common Stock representing such fractional
share interest, rounded upward, if necessary, to the nearest $.01, and (B) each
holder of Nugget Common Stock whose aggregate shares of Nugget Common Stock held
in one name or account were 750 or more received such number of whole shares
resulting from such reclassification as were equal to the whole number of shares
obtained by dividing 750 into the number of shares held by such holder and cash
for any fractional share interest resulting from such reclassification computed
in the manner set forth above (e.g., a holder of 400 shares of Nugget Common
Stock received cash in the amount of $.40 and a holder of 2,000 shares received
two replacement shares of Nugget Common Stock and cash in the amount of $.50).
The Reverse Stock Split was effected prior to the Nugget Merger and in such
Nugget Merger, each issued and outstanding share of Nugget Common Stock (after
the Reverse Stock Split) was converted into one share of Common Stock.
The Plan further authorized the consummation of the merger of Midcoast
Transmission Company, a Texas corporation ("Trans-mission"), with and into the
Issuer (the "Transmission Merger"), following the consummation of the Nugget
Merger. Under the terms of the Transmission Merger, the Issuer issued 100,000
shares of Midcoast Preferred Stock to the existing shareholders of Transmission,
Messrs. Herbst and Holmes, in exchange for all the issued and outstanding shares
of common stock, without par value, of Transmission. The principal asset of
Transmission was its joint venture interest in Midcoast Venture I, a Texas joint
venture (the "Venture"). Concurrently with the Transmission Merger, the Issuer
acquired from Natural, all of its joint venture interests in the Venture, in
exchange for the issuance of 100,000 shares of Midcoast Preferred Stock and the
assumption of Natural's joint venture obligations with respect to the Venture.
As a result of the Transmission Merger and the acquisition by the Issuer
of Natural's Interest in the Venture, the Issuer owns and operates directly all
of the Venture's assets, consisting of certain natural gas transmission and
distribution facilities, and supplies natural gas to customers through such
facilities, and supplies natural gas to customers through such facilities under
existing sales contracts.
With respect to the treatment of other claims against, and interests in,
Nugget, pursuant to the Plan of Reorganization, each holder of a secured claim
retained the lien securing such claim unaltered. Claimants holding allowed
general unsecured claims received in satisfaction of such amounts cash equal to
ninety percent of the claims, except for general unsecured claims of the Venture
which were eliminated upon the acquisition by the Issuer of the assets of the
Venture as described above.
Claimants holding allowed claims of $57,293.12 under the First Series
Convertible Notes (as defined in the Plan) received in satisfaction of such
claims Nugget Common Stock (Post Reverse Stock Split) at the rate of 8.56375
shares for each $1.00 of one-third of the portion of the allowed amounts of such
claims attributable to the principal amount outstanding on the petition date
under the First Series Convertible Notes and a Settlement Note (as defined in
the Plan) from the Issuer in an original principal amount equal to the remainder
ofsuch allowed amount of such claims.
Claimants holding allowed claims of $49,663.10 under the Second Series
Convertible Notes (as defined in the Plan) received in satisfaction of such
claims, Settlement Notes from the Issuer in original principal amounts equal to
the allowed amounts of such claims.
Claimants holding allowed claims of $16,106.85 under the Third Series
Convertible Notes (as defined in the Plan) received in satisfaction of such
claims Nugget Common Stock (Post Reverse Stock Split) at the rate of 8.56375
shares for each $1.00 of the portion of the allowed amounts of such claims
attributable to the principal outstanding on the Third Series convertible Notes
on the petition date, with the portion of such claims attributable to accrued
interest on the petition date being treated and paid as general unsecured
claims.
All Nugget Common Stock issued to claimants pursuant to the First Series
Convertible Notes and Third Series Convertible Notes were exchanged for Common
Stock in the Nugget Merger, and upon consummation of all of the transactions
discussed above in accordance with the Plan, there are approximately 306,255
shares of Common Stock outstanding and 200,000 shares of Midcoast Preferred
Stock outstanding.
Item 4. Purpose of Transaction.
Mr. Herbst acquired the securities of the Issuer pursuant to the Plan
described in Item 3 hereof. Except as set forth in the Shareholder Agreement
described in Item 6 hereof, Mr. Herbst has no present plan or proposal and is
not aware of any plan or proposal on the part of Mr. Holmes or Natural,
which relates to or would result in any of the actions set forth in parts
(a) through (j) of Item 4 of Schedule 13D, except that the Plan
contemplates that the board of directors of the Issuer may be increased to add
additional directors (in accordance with the Issuer's corporate documents), who
will be selected by he present board (Messrs. Herbst, Holmes and Tutcher), each
of such additional directors, if any, to serve until the next annual meeting of
shareholders of the Issuer. As of the date hereof, no additional director has
been selected. Any of Mr. Herbst, Mr. Holmes or Naturaly may from time to time
and at any time reconsider any or all of the activities which may result in any
of the actions set forth in such Item 4.
Item 5. Interest in Securities of the Issuer.
(a) Mr. Herbst is the owner of 63,090 shares of Common stock
(approximately 20.6% of the outstanding shares of Common Stock) as of the date
hereof (which percentage was subject to adjustment until September 15, 1993
under the terms of the Plan). Mr. Herbst also owns 50,000 shares of the
Issuer's 5% Cumulative Preferred Stock.
(b) Mr. Herbst has the sole power to vote all 63,090 shares of the Common
Stock, subject to the restrictions imposed under the Shareholder Agreement
described in Item 6 hereof. No other person has the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
such shares of Common Stock.
(c) Effective as of May 11, 1993, each of Mr. Herbst and Mr. Holmes
transferred 7,500 shares of Common Stock pursuant to separate transaction, each
of which was exempt from the reporting requirements of Section 16(a) of the
Securities Exchange Act of 1934, as amended, pursuant to Rule 16b-5 promulgated
thereunder. No consideration was received by either Mr. Herbst or Mr. Holmes as
a result of their transfer and a voluntary Form 4 has been filed with respect
thereto. Except as described herein, Mr. Herbst has not engaged in any
transaction in the Common Stock of the Issuer during the past 60 days.
The interests of Mr. Holmes and Natural in the securities of the Issuer are
set forth in Item 3 above. To the knowledge of Mr. Herbst, each of Mr. Holmes
and Natural has the sole power to vote the respective securities of the Issuer
owned by them, subject to the restrictions imposed under the Shareholder
Agreement, and except as set forth in this filing, Mr. Herbst knows of no
transaction engaged in by either Mr. Holmes or Natural with respect to the
securities of the Issuer during the past 60 days.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to the Securities of the Issuer.
On November 16, 1992, the Issuer, Natural, Mr. Herbst and Mr. Holmes,
together with all spouses of the designated individual shareholders entered into
a Shareholder Agreement (the "Shareholder Agreement") which places significant
restrictions on the holder's ability to transfer and vote the shares of the
Issuer's capital stock. The Shareholder Agreement provides that none of such
parties may transfer their respective shares without the prior written consent
of each shareholder, except for certain permitted transfers, including, the
pledge of all shares held by the shareholders to an institutional lender, the
simultaneous sale by each shareholder to the same third-party transferee, and
transfers to certain designated family members or trusts for the benefit of
designated family members. (The required consent was obtained for the transfers
described in Section 5(c) hereof.) Additionally, the Shareholder Agreement
provides that upon the death or mental incompetency of a shareholder or spouse
of a shareholder, as applicable, the Issuer shall have the right to acquire the
shares of capital stock held by such shareholder (including the stock of the
spouse of such shareholder) at its then fair market value as determined by
mutual agreement or by a qualified appraiser.
The Shareholder Agreement further provides that each shareholder and the
spouse of each individual shareholder shall vote all shares owned by them as a
single unit, with like vote, in the manner specified by any two of Natural, Mr.
Herbst or Mr. Holmes and that each shall vote for the election of Mr. Tutcher,
Mr. Herbst and Mr. Holmes, and any other person mutually agreeable to each of
such individuals, as directors of the Issuer.
Each of Dan C. Tutcher and Kimberly Tutcher, individually, executed the
Shareholder Agreement to evidence their mutual agreement that in the event of
the death or incapacity, as applicable, of either of them, the Issuer shall
have the right to purchase the shares of capital stock owned by Natural to the
same extent as if they (rather than Natural) owned the Issuer's stock
individually.
Except as described herein or in the Plan (attached hereto as Exhibit A)
or in the Shareholder Agreement (attached hereto as Exhibit B), there are no
other contracts, arrangements, under-standings or relationships (legal or
otherwise) between Mr. Herbst and any other person with respect to any
securities
of the Issuer, or to the knowledge of Mr. Herbst, between Mr. Holmes or Natural
and any other person with respect to the securities of the Issuer.
Item 7. Material to be Filed as Exhibits.
Exhibit A. Plan of Reorganization Under Chapter 11 of the United States
Bankruptcy Code for Nugget Oil Corporation.*
Exhibit B. Shareholder Agreement, dated as of November 16, 1992, by and
among Midcoast Energy Resources, Inc., Midcoast Natural Gas
Inc., Stevens G. Herbst and Kenneth B. Holmes, Jr.*
* Previously filed
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
DATED: October 30, 1993.
/s/ STEVENS G. HERBST
Stevens G. Herbst
