UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
VERITAS DGC INC.
-------------------------
(Name of Issuer)
Ordinary Shares, $.01 Par Value
-------------------------------------
(Title of Class of Securities)
92343P107
--------------
(CUSIP Number)
Stephen M. Vine, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
399 Park Avenue
New York, New York 10022
(212) 872-1000
------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 12, 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 [X]. (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 disclosure
provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "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).
Continued on following page(s)
Page 1 of 15 Pages
Exhibit Index: Page 12
<PAGE>
SCHEDULE 13D
CUSIP No. 92343P107 Page 2 of 15 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Soros Capital L.P.
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [X]
3 SEC Use Only
4 Source of Funds*
OO
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Bermuda
7 Sole Voting Power
Number of 43,200
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 43,200
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
43,200
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
.38%
14 Type of Reporting Person*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 92343P107 Page 3 of 15 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Steven Gilbert(in his personal capacity and in his capacity as
managing general partner of Soros Capital L.P.)
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [X]
3 SEC Use Only
4 Source of Funds*
AF; PF
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
7 Sole Voting Power
Number of 60,105
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 60,105
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
60,105
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
0.53%
14 Type of Reporting Person*
IA; IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 92343P107 Page 4 of 15 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
George Soros (in his capacity as sole proprietor of Soros Fund
Management)
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [X]
3 SEC Use Only
4 Source of Funds*
OO
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
7 Sole Voting Power
Number of 983,930
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 983,930
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
983,930
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
8.77%
14 Type of Reporting Person*
IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Page 5 of 15 Pages
This statement on Schedule 13D relates to the ordinary shares,
par value $0.01 per share (the "Shares"), of Veritas DGC Inc. (the "Issuer").
This statement on Schedule 13D is being filed by the Reporting Persons (as
defined below) voluntarily to report that, as a result of a merger (as more
fully described herein, the "Merger") between Digicon Inc. ("Digicon") and
Veritas Energy Services, Inc. ("Veritas"), the Reporting Persons may be deemed
to be the beneficial owners of more than 5% of the outstanding Shares of the
Issuer. For information relating to the securities of Digicon and ownership of
such securities by the Reporting Persons, reference is made to the initial
statement on Schedule 13D dated December 1, 1986 and all amendments thereto
relating to the securities of Digicon, which were filed by, among others, the
Reporting Persons.
Item 1. Security and Issuer.
This statement on Schedule 13D relates to the Shares of the
Issuer. The address of the principal executive offices of the Issuer is 3701
Kirby Drive, Houston, Texas 77098.
Item 2. Identity and Background.
This statement is being filed on behalf of the following persons
(the "Reporting Persons"):
(1) Soros Capital L.P., a Bermuda limited partnership ("Soros
Capital");
(2) Mr. Steven J. Gilbert, in his personal capacity and in his
capacity as the managing general partner of Soros Capital ("Mr. Gilbert"); and
(3) Mr. George Soros, in his capacity as sole proprietor of Soros
Fund Management ("Mr. Soros").
Soros Capital and Mr. Gilbert
- -----------------------------
Soros Capital is a Bermuda limited partnership principally
engaged in direct and indirect investments in buy-out transactions and
restructuring, venture capital, mezzanine finance and strategic and special
situations investments. Its principal office is located at Richmond House, 12
Par-La-Ville Road, Hamilton HM DX, Bermuda. Mr. Gilbert is the managing general
partner and Soros Capital (Bermuda) Ltd. is the resident general partner of
Soros Capital. Quantum Industrial Partners LDC, a Cayman Islands limited
duration company, is the sole limited partner of Soros Capital.
Soros Capital (Bermuda) Ltd. is a Bermuda exempted company, whose
sole purpose is to act as resident general partner of Soros Capital. The
principal office of Soros Capital (Bermuda) Ltd. is at Richmond House, 12
Par-La-Ville Road, Hamilton HM DX, Bermuda.
The principal occupation of Mr. Gilbert, a United States citizen,
is as an investment manager, a function which is carried out in his capacity as
the managing general partner of Soros Capital. Mr. Gilbert is a Managing
Director of Commonwealth Capital Partners, a private equity investment fund. Mr.
Gilbert also serves as a director of the Issuer. Mr. Gilbert's business address
is 888 Seventh Avenue, 33rd Floor, New York, New York 10106.
<PAGE>
Page 6 of 15 Pages
Mr. Soros
- ---------
Mr. Soros is the sole proprietor of an investment advisory firm
conducting business under the name Soros Fund Management ("SFM"). The Shares
reported herein of which Mr. Soros may be deemed to be the beneficial owner are
held for the account of Quantum Partners LDC, a Cayman Islands exempted limited
duration company ("Quantum Partners"). Quantum Partners has granted investment
discretion to SFM pursuant to an investment advisory contract.
SFM is a sole proprietorship of which Mr. Soros is the sole
proprietor. SFM has its principal office at 888 Seventh Avenue, 33rd Floor, New
York, New York 10106. Its sole business is to serve, pursuant to contract, as
the principal investment manager to several foreign investment companies (the
"SFM Clients"), including Quantum Partners. Quantum Partners has its principal
office at Kaya Flamboyan 9, Willemstad, Curacao, Netherlands Antilles. SFM's
contracts with SFM Clients generally provide that SFM is responsible for
designing and implementing the SFM Clients' overall investment strategy; for
conducting direct portfolio management strategies to the extent that SFM
determines that it is appropriate to utilize its own portfolio management
capabilities; for selecting, evaluating and monitoring other investment advisors
who manage separate portfolios on behalf of SFM Clients; and for allocating and
reallocating the SFM Clients' assets among the outside managers and itself.
The principal occupation of Mr. Soros, a United States citizen,
is his direction of the activities of SFM, which is carried out in his capacity
as the sole proprietor of SFM at SFM's principal office. Information concerning
the identity and background of the Managing Directors of SFM is set forth in
Annex A hereto and incorporated by reference in response to this Item 2.
Pursuant to regulations promulgated under Section 13(d) of the
Act, Mr. Soros (as the sole proprietor and the person ultimately in control of
SFM) may be deemed a beneficial owner of securities, including the Shares, held
for the account of Quantum Partners as a result of the contractual authority of
SFM to exercise voting and dispositive power with respect to such securities.
During the past five years, none of the Reporting Persons,
Quantum Partners and, to the best of the Reporting Persons' knowledge, any other
person identified in response to this Item 2 has been (a) convicted in a
criminal proceeding, or (b) a party to any civil proceeding as a result of which
he has been 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.
Item 3. Source and Amount of Funds or Other Consideration.
The Shares reported as acquired herein were acquired pursuant to
the transactions described in Item 4 below, and such disclosure is incorporated
herein by reference in response to this Item 3.
The Shares held for the account of Quantum Partners may be held
through margin accounts maintained with brokers, which extend margin credit as
and when required to open or carry positions in its margin accounts, subject to
applicable federal margin regulations, stock exchange rules and such firm's
credit policies. The positions which may be held in the margin accounts,
including the Shares, are pledged as collateral security for the repayment of
debit balances in the respective accounts.
<PAGE>
Page 7 of 15 Pages
Item 4. Purpose of Transaction.
Prior to the consummation of the Merger, Digicon's Board of
Directors approved and recommended to its shareholders a plan of
recapitalization (the "Plan of Recapitalization"), which was subsequently
approved by the requisite vote of the shareholders of Digicon. Pursuant to the
Plan of Recapitalization, Digicon's Certificate of Incorporation was amended,
among other things, (i) to reclassify outstanding shares of common stock of
Digicon (the "Old Common Stock") as the Shares, a series of ordinary shares
having the same rights and privileges as the Old Common Stock, and (ii) to
change Digicon's name to "Veritas DGC Inc." In addition, pursuant to the Plan of
Recapitalization, warrants to purchase the Old Common Stock were converted into
warrants to purchase the Shares. Accordingly, those persons who may have been
deemed to be the beneficial owners of the Old Common Stock may now be deemed, as
a result of the Plan of Recapitalization, beneficial owners of the Shares.
Pursuant to the terms of the Merger, each share of Veritas common
stock was exchanged for 0.8 of a share of a new class of exchangeable shares of
Veritas, which resulted in the issuance of approximately 7.0 million
exchangeable shares, with each exchangeable share representing beneficial
ownership of one Share. Holders of the exchangeable shares are entitled, at any
time following August 30, 1996, the effective date of the Merger, until the 18th
anniversary thereof (unless extended by the Veritas Board of Directors to a date
not later than 25 years from the effective date of the Merger), to require
Veritas to exchange such exchangeable shares by delivering an equivalent number
of Shares. Digicon and Veritas have entered into certain ancillary agreements to
ensure that holders of exchangeable shares will have voting, dividend and a
liquidation rights equivalent to those of holders of the Shares.
All of the Shares reported herein as having been acquired for the
accounts of Mr. Gilbert, Soros Capital or Quantum Partners were acquired for
investment purposes. Other than as set forth herein, neither the Reporting
Persons, nor, to the best of their knowledge, any of the other individuals
identified in response to Item 2, have any plans or proposals which relate to or
would result in any of the transactions described in subparagraphs (a) through
(j) of Item 4 of Schedule 13D. The Reporting Persons reserve the right to
acquire additional securities of the Issuer, to dispose of such securities at
any time or to formulate other purposes, plans or proposals regarding the Issuer
or any of its securities, to the extent deemed advisable in light of general
investment and trading policies of SFM Clients and Soros Capital, market
conditions or other factors.
Item 5. Interest in Securities of the Issuer.
(a) (i) The aggregate number of Shares of which Soros Capital may
be deemed the beneficial owner is 43,200 Shares (approximately 0.38% of the
total number of Shares outstanding assuming the exercise of warrants of the
Issuer held for its account and assuming that the number of outstanding shares
of Digicon equals the number of outstanding Shares), which Shares will be
issuable upon the exercise of warrants held for the account of Soros Capital.
(ii) The aggregate number of Shares of which Mr. Gilbert may be
deemed the beneficial owner is 60,105 Shares (approximately 0.53% of the total
number of Shares outstanding assuming the exercise of warrants held for the
account of Soros Capital and options held for Mr. Gilbert's personal account and
assuming that the number of outstanding shares of Digicon equals the number of
outstanding Shares), which number consists of: (i) 43,200 Shares issuable upon
exercise of warrants held for the account of Soros Capital, (ii) 13,332 Shares
issuable upon exercise of options held for the Mr. Gilbert's personal account,
and (iii) 3,573 Shares held for Mr. Gilbert's personal account.
<PAGE>
Page 8 of 15 Pages
The filing of this statement on a joint basis by Soros Capital
and Mr. Gilbert shall not be construed as an admission that either is the
beneficial owner of any Shares not held for its own account.
(iii) The aggregate number of Shares of which Mr. Soros may be
deemed to be the beneficial owner are the 983,930 Shares held for the account of
Quantum Partners (approximately 8.77% of the total number of Shares outstanding
assuming that the number of outstanding shares of Digicon equals the number of
outstanding Shares).
(b) (i) By virtue of his position as the managing general partner
of Soros Capital, Mr. Gilbert may be deemed to have the sole power to direct the
disposition and voting of the Shares held for the account of Soros Capital.
(ii) Mr. Gilbert has the sole power to dispose of and vote the
Shares held for his personal account.
(iii) Pursuant to the contract between SFM and Quantum Partners,
Mr. Soros, in his capacity as the sole proprietor of SFM, may be deemed to have
the sole power to direct the disposition and voting of Shares held for the
account of Quantum Partners.
(c) Except as described in Item 4 hereof, which is incorporated
by reference in response to this Item 5(c), there have been no transactions in
the Shares effected by any of the Reporting Persons since July 13, 1996 (the 60
days prior to the date hereof).
(d) (i) The partners of Soros Capital have the right to
participate in the receipt of dividends from, or proceeds from the sale of,
securities held for the account of Soros Capital.
(ii) The shareholders of Quantum Partners have the right to
participate in the receipt of dividends from, or proceeds from the sale of,
securities held for the account of Quantum Partners.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings in Relationship with
Respect to Securities of the Issuer.
Mr. Gilbert previously reached an understanding with Quantum
Partners pursuant to which Mr. Gilbert was to furnish investment advice to
Quantum Partners regarding its investment in Digicon. It was contemplated that
Mr. Gilbert would share in any profits and losses on the Old Common Stock held
for the account of Quantum Partners from 1991 and thereafter. This understanding
will continue with respect to such Shares reported herein as being held for
Quantum Partners' account.
From time to time, the Reporting Persons, Quantum Partners and/or
Soros Capital may lend portfolio securities to brokers, banks or other financial
institutions. These loans typically obligate the borrower to return the
<PAGE>
Page 9 of 15 Pages
securities, or an equal amount of securities of the same class, to the lender
and typically provide that the borrower is entitled to exercise voting rights
and to retain dividends during the term of the loan. From time to time to the
extent permitted by applicable laws, Quantum Partners, other SFM Clients and/or
Soros Capital may borrow securities, including the Shares, for the purpose of
effecting, and may effect, short sale transactions, and may purchase securities
for the purpose of closing out short positions in such securities.
Except as disclosed above, the Reporting Persons do not have any
contracts, arrangements, understandings or relationships with respect to any
securities of the Issuer.
Item 7. Material to be Filed as Exhibits.
(a) Joint Filing Agreement, dated as of September 12, 1996 by and
between Soros Capital L.P., Mr. Steven J. Gilbert and Mr. George Soros.
(b) Power of Attorney dated April 16, 1996 granted by Mr. George
Soros in favor of Mr. Sean C. Warren.
(c) Power of Attorney dated June 7, 1996 granted by Mr. Steven J.
Gilbert in favor of Mr. Richard W. Gaenzle.
<PAGE>
Page 10 of 15 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: September 12, 1996 SOROS CAPITAL L.P.
By: Steven J. Gilbert
Managing General Partner
By: /S/ RICHARD W. GAENZLE
-----------------------
Richard W. Gaenzle
Attorney-in-Fact
Date: September 12, 1996 STEVEN J. GILBERT
By: /S/ RICHARD W. GAENZLE
--------------------------
Richard W. Gaenzle
Attorney-in-Fact
Date: September 12, 1996 GEORGE SOROS
By: /S/ SEAN C. WARREN
--------------------------
Sean C. Warren
Attorney-in-Fact
<PAGE>
Page 11 of 15 Pages
ANNEX A
The following is a list of all of the persons who serve as
Managing Directors of Soros Fund Management ("SFM"):
Scott K. H. Bessent
Walter Burlock
Stanley Druckenmiller
Jeffrey L. Feinberg
Arminio Fraga
Gary Gladstein
Robert K. Jermain
David N. Kowitz
Elizabeth Larson
Alexander C. McAree
Paul McNulty
Gabriel S. Nechamkin
Steven Okin
Dale Precoda
Lief D. Rosenblatt
Mark D. Sonnino
Filiberto H. Verticelli
Sean C. Warren
Each of the above-listed persons is a United States citizen whose principal
occupation is serving as Managing Director of SFM, and each has a business
address c/o Soros Fund Management, 888 Seventh Avenue, New York, New York 10106.
During the past five years, none of the above-listed persons has been (i)
convicted in a criminal proceeding, or (ii) a party to any civil proceeding as a
result of which any such persons has been 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 violations with
respect to such laws.
<PAGE>
Page 12 of 15 Pages
INDEX OF EXHIBITS
EXHIBIT PAGE
A Joint Filing Agreement, dated as of September 12, 1996
by and between Soros Capital L.P., Mr. Steven J. Gilbert
and Mr. George Soros. 13
B Power of Attorney dated April 16, 1996 granted by Mr.
George Soros in favor of Mr. Sean C. Warren. 14
C Power of Attorney dated June 7, 1996 granted by Mr.
Steven J. Gilbert in favor of Mr. Richard W. Gaenzle. 15
Page 13 of 15 Pages
EXHIBIT A
JOINT FILING AGREEMENT
The undersigned hereby agree that the statement on Schedule 13D
with respect to the Common Stock of Veritas DGC Inc. dated September 12, 1996
is, and any amendments thereto signed by each of the undersigned shall be, filed
on behalf of each of us pursuant to and in accordance with the provisions of
Rule 13d-1(f) under the Securities Exchange Act of 1934.
Date: September 12, 1996
SOROS CAPITAL L.P.
By: Steven J. Gilbert
Managing General Partner
By: /S/ RICHARD W. GAENZLE
--------------------------
Richard W. Gaenzle
Attorney-in-Fact
STEVEN J. GILBERT
By: /S/ RICHARD W. GAENZLE
--------------------------
Richard W. Gaenzle
Attorney-in-Fact
GEORGE SOROS
By: /S/ SEAN C. WARREN
----------------------------
Sean C. Warren
Attorney-in-Fact
Page 14 of 15 Pages
EXHIBIT B
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENT, that I, GEORGE SOROS, hereby make, constitute and
appoint SEAN C. WARREN as my agent and attorney in fact for the purpose of
executing in my name, in my personal capacity or in my capacity as sole
proprietor of Soros Fund Management, all documents, certificates, instruments,
statements, filings and agreements ("documents") to be filed with or delivered
to any foreign or domestic governmental or regulatory body or required or
requested by any other person or entity pursuant to any legal or regulatory
requirement relating to the acquisition, ownership, management or disposition of
securities or other investments, and any other documents relating or ancillary
thereto, including but not limited to, all documents relating to filings with
the United States Securities and Exchange Commission (the "SEC") pursuant to the
Securities Act of 1933 or the Securities Exchange Act of 1934 (the "Act") and
the rules and regulations promulgated thereunder, including: (1) all documents
relating to the beneficial ownership of securities required to be filed with the
SEC pursuant to Section 13(d) or Section 16(a) of the Act including, without
limitation: (a) any acquisition statements on Schedule 13D or Schedule 13G and
any amendments thereto, (b) any joint filing agreements pursuant to Rule
13d-1(f) and (c) any initial statements of, or statements of changes in,
beneficial ownership of securities on Form 3, Form 4 or Form 5 and (2) any
information statements on Form 13F required to be filed with the SEC pursuant to
Section 13(f) of the Act.
All past acts of the attorney-in-fact in furtherance of the foregoing are hereby
ratified and confirmed.
This power of attorney shall be valid from the date hereof until revoked by me.
IN WITNESS WHEREOF, I have executed this instrument this 16th of April, 1996.
/s/ George Soros
-----------------------
GEORGE SOROS
Page 15 of 15 Pages
EXHIBIT C
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENT, that I, STEVEN J. GILBERT, hereby make,
constitute and appoint RICHARD W. GAENZLE and JOHN D. McEVOY, acting singly and
not jointly, as my agents and attorneys in fact for the purpose of executing in
my name, in my personal capacity or in my capacity as a general partner of Soros
Capital L.P., all documents, certificates, instruments, statements, filings and
agreements ("documents") to be filed with or delivered to any foreign or
domestic governmental or regulatory body or required or requested by any other
person or entity pursuant to any legal or regulatory requirement relating to the
acquisition, ownership, management or disposition of securities or other
investments, and any other documents relating or ancillary thereto, including
but not limited to, all documents relating to filings with the United States
Securities and Exchange Commission (the "SEC") pursuant to the Securities Act of
1933 or the Securities Exchange Act of 1934 (the "Act") and the rules and
regulations promulgated thereunder, including: (1) all documents relating to the
beneficial ownership of securities required to be filed with the SEC pursuant to
Section 13(d) or Section 16(a) of the Act including, without limitation: (a) any
acquisition statements on Schedule 13D or Schedule 13G and any amendments
thereto, (b) any joint filing agreements pursuant to Rule 13d-1(f) and (c) any
initial statements of, or statements of changes in, beneficial ownership of
securities on Form 3, Form 4 or Form 5 and (2) any information statements on
Form 13F required to be filed with the SEC pursuant to Section 13(f) of the Act.
All past acts of the attorneys in fact in furtherance of the foregoing are
hereby ratified and confirmed.
This power of attorney shall be valid from the date hereof until revoked by me.
IN WITNESS WHEREOF, I have executed this instrument this 7th day of June, 1996.
/s/ Steven J. Gilbert
-------------------------
STEVEN J. GILBERT
