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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 6)*
ERC Industries, Inc.
(Name of Issuer)
Common Stock, par value $0.01 per share
(Title of Class of Securities)
268912102
(CUSIP Number)
Marc H. Folladori, Haynes and Boone, L.L.P.
1000 Louisiana Street, Suite 4300, Houston, Texas 77002
(713) 547-2000
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and Communications)
March 5, 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 filing 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 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).
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SCHEDULE 13D
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CUSIP NO. 268912102 PAGE 2 OF 18 PAGES
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
John Wood Group PLC, a company registered in Scotland and
incorporated under the laws of the United Kingdom
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OR LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United Kingdom
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 7,318,686
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 7,318,686
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
7,318,686
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
13
52.8%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
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Item 1. Security and Issuer.
Item 1 is hereby amended and restated in its entirety by the following
paragraph:
"This Statement relates to the Common Stock, $0.01 par value (the "Common
Stock") of ERC Industries, Inc., a Delaware corporation ("New ERC"). New ERC
was formerly known as ERC Subsidiary, Inc. and is a successor by merger to ERC
Industries, Inc., a Delaware corporation (referred to herein as "Old ERC").
The address of the principal executive offices of New ERC is 2906 Holmes Road,
Houston, Texas 77051. Old ERC and New ERC are sometimes referred to herein
generally as the "Company."
Item 2. Identity and Background.
Item 2 is hereby amended and restated in its entirety by the following
paragraphs:
"The person filing this statement is John Wood Group PLC, a company
registered in Scotland and incorporated under the laws of the United Kingdom
(referred to herein as the "Reporting Person"). The address of its principal
business and its principal office is John Wood House, Greenwell Road, East
Tullos, Aberdeen, Scotland ABI 4AX.
The Reporting Person is, directly and through its subsidiaries, engaged
in the international oil services industry.
The names, business addresses, and present principal employment of the
directors and executive officers of the Reporting Person and the principal
business office of the organization in which such employment is conducted are
described in Schedule I which is attached hereto and incorporated herein by
reference.
Neither the Reporting Person nor, to the best of its knowledge, any
controlling person or person named herein has, during the last five years,
been convicted in a criminal proceeding (excluding traffic violations and
similar misdemeanors) .
Neither the Reporting Person nor to the best of its knowledge any
controlling person or person named herein has, during the last five years,
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is, 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.
Item 3 is hereby amended and restated in its entirety by the following
paragraphs:
"The $4,904,014.50 used to make purchases of the Common Stock as
previously reported pursuant to Schedule 13D and the $633,750.00 used to make
the purchase reported by this Amendment No. 6 to Schedule 13D came from the
Reporting Person's working capital."
Page 3 of 18 Pages
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Item 4. Purposes of the Transaction.
Item 4 is hereby amended and restated in its entirety by the following
paragraphs:
"GENERAL. The Reporting Person originally acquired 6,538,686 shares of
Common Stock in 1992 in order to obtain a significant equity interest in the
Company. On March 5, 1996, the Reporting Person acquired an additional
780,000 shares of Common Stock as further described herein. As a result of
these acquisitions, the Reporting Person owns approximately 52.8% of the
outstanding capital stock of the Company.
It is presently contemplated that the Reporting Person may, depending on
its evaluation of the Company's business, prospects and financial condition,
the market for the Common Stock, other opportunities available to the
Reporting Person, general economic conditions, regulatory conditions,
financial and stock market conditions and other future developments, make
additional purchases of Common Stock either in the open market or in private
transactions (or combinations thereof). The Reporting Person is continuing to
evaluate its investment in the Company, including the feasibility of acquiring
all of the capital stock of the Company. Any such acquisition would
necessarily involve extraordinary corporate actions with respect to the
Company which may involve certain of the actions or occurrences set forth in
paragraphs (a) through (j) of Item 4 of Schedule 13D, including, without
limitation, actions to eliminate minority interests in the Company, terminate
registration status pursuant to Section 12(g)(4) of the 1934 Act and delist
the Common Stock from the Nasdaq Stock Market. Depending upon the
circumstances, the Reporting Person might also hold its shares of Common Stock
for an extended period of time, or may decide to sell all or part of its
investment in the Common Stock. Any such disposition, however, would be
subject to a potential restriction on transfer of shares of Common Stock as
described below. While the Reporting Person is continuing to evaluate its
investment in the Company, no detailed plans or arrangements have been made at
this time.
ORIGINAL PURCHASE AGREEMENT. The Company filed preliminary proxy
material in 1992 with the Securities and Exchange Commission concerning the
Company's Annual Meeting of Stockholders. At this Annual Meeting, which
occurred in April 1993, the Company's stockholders were asked to consider and
vote upon, among other things, a proposed merger (the "Merger") of Old ERC
with and into its wholly-owned Delaware subsidiary, ERC Subsidiary, Inc. The
merger proposal was put forth principally for tax reasons, i.e., with the
intention of preserving and maximizing the Company's ability (and ERC
Subsidiary, Inc.'s ability after the Merger) to offset taxable income with the
Company's net operating loss carry forward. See "Merger Approval" below.
The Merger was proposed in order to satisfy a condition precedent to the
Reporting Person's purchase of 6,538,686 shares of Common Stock pursuant to a
Stock Purchase Agreement dated October 15, 1992 (the "Purchase Agreement")
entered into among the Company, the Reporting Person (as purchaser), the
Company's then-largest stockholder, Quantum Fund, N.V. ("Quantum"), and Warren
H. Haber, Lawrence N. Pohly and John L. Teager (who, along with Quantum, are
collectively referred to herein as the "Sellers"). See Items 5 and 6 below.
The Purchase Agreement provided, as a condition to its consummation, that the
Certificate of Incorporation of ERC Subsidiary, Inc., the surviving
corporation in the Merger, contain certain stock transfer restrictions to
preserve the Company's net operating loss carry forward tax benefits.
CHARTER PROVISIONS. Except for the restrictions on transfer of shares of
Common Stock to be imposed by the Certificate of Incorporation and Bylaws of
ERC Subsidiary, Inc., the provisions
Page 4 of 18 Pages
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of the New ERC charter documents were substantially the same as the charter
documents of Old ERC. Although the restrictions on transfer of shares were
not sought to be imposed as an anti-takeover device, the effect of including
these provisions may be to impede the acquisition of control of the Company,
by requiring any person considering an unsolicited tender offer or takeover
proposal to first negotiate with the Board of Directors. In addition, the
Certificate of Incorporation and Bylaws of the Company contained a number of
provisions which may have had the effect of impeding the acquisition of
control of the Company by any person. Set forth below are the other principal
differences between the Old ERC charter documents and the New ERC charter
documents.
(A) Preferred Stock
The Old ERC Certificate of Incorporation authorized the issuance of
875,000 shares of Convertible Preferred Stock, par value $1.00 per share, and
set forth the powers, rights, preferences, and limitations of the Convertible
Preferred Stock. No shares of the Convertible Preferred Stock were issued by
Old ERC. The New ERC Certificate of Incorporation authorizes the issuance of
10,000,000 shares of serial preferred stock, par value $1.00 per share and
30,000,000 shares of common stock $0.01 par value.
In addition, the New ERC Bylaws empower an executive committee, if one is
designated by the Board of Directors, to fix the number of shares or authorize
the increase or decrease of the shares of any series of stock of New ERC, if
authorized by Board resolution.
(B) Stockholder Action by Written Consent
The Old ERC Certificate of Incorporation prohibited action by
stockholders by written consent in lieu of a meeting; however, holders of
shares of Convertible Preferred Stock, serial preferred stock or other class
of preferred stock could act by written consent to exercise the special voting
rights, if any, of such shares or series to elect directors as provided in the
Company Certificate of Incorporation or in a resolution adopted by the Board
of Directors providing for the issuance of such shares.
The New ERC Certificate of Incorporation and Bylaws do not contain any
prohibitions of actions by stockholders by written consent in lieu of a
meeting. The New ERC Bylaws contain enabling provisions concerning such
written consent procedures.
Thus, under Delaware law, stockholders of New ERC, unlike the
stockholders of the Company, may take any action required or permitted at an
annual or special meeting of stockholders without a meeting, without prior
notice and without a vote, if a consent (or consents) in writing, setting
forth the action so taken, is signed by holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted. In this respect, the Reporting Person could authorize
certain transactions or structural changes affecting New ERC, including a
removal of its directors, without the necessity of calling and holding a
meeting of New ERC stockholders for such purpose. See "Purchase of Quantum
Shares" below.
(C) Stockholder Proposals
Stockholder proposals brought before meetings of stockholders, in addition
to satisfying certain other conditions, must also be a proper subject for
actions by security holders under the New ERC Certificate of Incorporation.
This additional condition was not contained in the Old ERC Certificate of
Incorporation.
Page 5 of 18 Pages
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(D) Removal of Directors
The Old ERC Certificate of Incorporation provided that, "Subject to the
rights of holders of any class or series of preferred stock, a director may be
removed, with or without cause, only by (i) the affirmative vote of the
holders of at least a majority in voting power of the shares entitled to vote
in the election of directors or (ii) the affirmative vote of majority of the
Board of Directors constituting at least a majority of the entire board, but
only if a majority of the directors acting favorably upon such matter are
"Continuing Directors" (as defined therein).
The New ERC Certificate of Incorporation provides that, subject to the
rights of any series of Serial Preferred Stock or other class of preferred
stock, a director may be removed, only by: (i) the affirmative vote, with or
without cause, of the holders of at least a majority in voting power of the
shares entitled to vote in the election of directors or (ii) the affirmative
vote, but only for cause, of members of the Board of Directors constituting at
least a majority of the entire board, but only if a majority of the directors
acting favorably upon such matter are Continuing Directors.
(E) Amendments
The provisions contained in the Old ERC Certificate of Incorporation
relating to business combinations could not be amended without the affirmative
vote of the holders of two-thirds of the shares entitled to vote in the
election of directors; provided, however, that such amendment could be
affected by a vote of the holders of a majority of the shares entitled to vote
in the election of directors if such amendment is declared advisable by the
Board of Directors by the affirmative vote of the majority of the Board of
Directors, but only if a majority of the Board members acting favorably upon
such matters are Continuing Directors. The New ERC Certificate of
Incorporation provides that any amendment to its business combination
provisions shall require the affirmative vote of the holders of at least two-
thirds of the shares entitled to vote in the election of directors. There is
no provision for any Board of Directors determination to lower such required
vote to a majority of the voting shares.
CONSUMMATION OF THE ORIGINAL PURCHASE. The Company issued a press release
on December 2, 1992, announcing that it had rejected an unsolicited offer from
a third party to acquire all outstanding shares of the Company's common stock
for $0.77 per share. In addition, the Reporting Person understands that the
announcement indicated that the Company's board of directors, in rejecting the
unsolicited offer, determined that the Company was not for sale at the time
and that after considering all relevant information, the offer was inadequate.
On December 4, 1992, the Reporting Person acquired 6,503,686 shares of
common stock from the Sellers in accordance with the terms of the Purchase
Agreement. The Reporting Person purchased 6,303,686 shares from Quantum,
100,000 shares from Mr. Haber, and 100,000 shares from Mr. Pohly and a charity
of Mr. Pohly's. In addition, the Reporting Person had the right under the
Purchase Agreement to acquire 35,000 shares from Mr. Teager, which purchase
closed on December 18, 1992. The total 6,538,686 shares purchased by the
Reporting Person and which the Reporting Person had the right to acquire at
the time represented approximately 47.2% of the outstanding shares of Common
Stock.
In addition, (i) the Reporting Person agreed that it would use its best
efforts to cause the Company to, and the Company agreed that it would, cause a
meeting of its stockholders to be called and held for the purposes of voting
on the merger (the "Merger") of Old ERC with and into its wholly-owned
subsidiary, ERC Subsidiary, Inc. on substantially the terms and conditions set
forth in the Old ERC preliminary proxy material filed in October 1992 with the
Securities and Exchange
Page 6 of 18 Pages
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Commission, and (ii) the Reporting Person agreed that it would vote its shares
of common stock in the same ratio as a majority of the minority shareholders
voting on the Merger. Additionally, the Reporting Person agreed to provide
the Company the information respecting the Reporting Person's nominees for
appointment to the board of directors of the Company required by Section 14(f)
of, and Rule 14f-1 under, the Securities Exchange Act of 1934.
The Company, the Reporting Person and Steven J. Gilbert, Gary S.
Gladstein, Warren H. Haber, Gerard E. Manolovici, and Richard H. Rau (the
"Indemnitees") further agreed that for a period of five years from December 4,
1992, the Reporting Person would use its best efforts to, and the Company
would, maintain in effect one or more directors' and officers' liability
policies providing coverage for each of the Indemnitees with respect to acts
or omissions occurring on or prior to their dates of resignation on no less
favorable terms than the insurance coverage currently maintained by the
Company; provided that such coverage was available at commercially reasonable
rates, but in any event, such coverage would be provided in an amount not less
than that which was obtainable for the premium amounts which the Company then
pays. In addition, for the same period, the Reporting Person agreed that it
would use its best efforts to cause the Company to, and the Company agreed to,
not amend, alter, modify or change the provisions of the Company's Certificate
of Incorporation and Bylaws relating to indemnification of directors and
officers as in effect on December 4, 1992, unless such amendment provided
broader indemnification rights to its then-current and former officers and
directors than prior law permitted the Company to provide.
Additionally, the Purchase Agreement contemplated that the Sellers would
use their best efforts to cause the resignations of four current directors of
the Company and cause the board of directors of the Company to select four
designees of the Reporting Person to fill the vacancies caused by such
resignations. Effective as of January 8, 1993, Steven J. Gilbert, Gary S.
Gladstein, Gerard E. Manolovici and Warren H. Haber resigned as directors of
the Company. The vacancies created by their resignations were filled on that
date by the Board of Directors of the Company electing and appointing J. Derek
P. Jones, Allister G. Langlands, Edwin C. Garrett and C. Nicholas Brown,
designees of the Reporting Person, as directors of the Company to serve their
unexpired terms. Mr. Langlands became a Class 3 director of the Company to
serve the remainder of Mr. Haber's term as director which expires at the next
annual meeting of stockholders of the Company. Mr. Brown became a Class 1
director to serve the remainder of Mr. Gilbert's term. Mr. Jones became a
Class 2 director to serve the remainder of Mr. Gladstein's term. Mr. Garrett
also became a Class 2 director to serve the remainder of Mr. Manolovici's
term. Quantum had agreed in the Purchase Agreement to use its best efforts to
cause the election of Messrs. Jones, Langlands, Garrett and Brown to fill the
vacancies caused by the resignations of Messrs. Gilbert, Gladstein, Manolovici
and Haber.
MERGER APPROVAL. On April 16, 1993, the stockholders of Old ERC, approved
the merger (the "Merger") of the Company with and into New ERC, its wholly-
owned subsidiary. Pursuant to the Merger, each share of common stock, par
value $0.01 per share, of Old ERC was converted into one share of Common Stock
of New ERC. As a result of the filing of the Certificate of Ownership and
Merger in Delaware, New ERC changed its name to ERC Industries, Inc.
As a result of the Merger, the Certificate of Incorporation of the Company
now contains certain stock transfer restrictions in order to seek to preserve
the Company's net operating losses available for carryforward (the "NOL
Carryforwards"). The Certificate of Incorporation of the Company provides
that no person who, as a result of any attempted transfer of Common Stock of
the Company having a fair market value equal to 5% or more of the aggregate
fair market value of the outstanding shares of the Company's Common Stock, may
acquire shares of the Company's Common Stock (or options, warrants and rights
or securities exercisable, convertible or
Page 7 of 18 Pages
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exchangeable therefor), unless such person obtains the approval of the Board
of Directors of the Company. Any attempted transfer with Board approval (or
approval of a duly appointed committee of the Board) will be void and without
effect, and the intended transferee will be deemed to have appointed the
Company as exclusive agent to sell such shares to a transferee eligible to
acquire such shares or otherwise approved by the Board of Directors of the
Company (or a committee thereof). All proceeds from the sale of such shares
shall be remitted to such appointed transferee. The restriction on transfer
will terminate upon the earliest to occur of (i) December 31, 2002, (ii) the
date when the existing NOL Carryforwards expire or (iii) the date when the NOL
Carryforwards become subject to the limitations of Section 382 of the Code.
In addition to receiving the requisite vote required under Delaware law,
the Merger was also approved by holders of a majority of the shares of Common
Stock voting for or against the Merger (and not abstaining), not counting any
votes attributable to shares held or controlled by the Reporting Person,
Quantum Fund, N.V., and Warren H. Haber, a former director of the Company.
Effective as of June 11, 1993, C. Nicholas Brown and Edwin C. Garrett
resigned as directors of New ERC. The vacancies created by their resignations
were filled effective as of that date by the Board of Directors of New ERC
electing and appointing George W. Tilley and Raymond A. Johnson as directors
to serve their unexpired terms. Mr. Tilley became a Class 1 director to serve
the remainder of Mr. Brown's term. Mr. Tilley's current principal occupation
is President and Chief Executive Officer of Grant Geophysical Company in
Houston, Texas, a geophysical seismic and services company. Formerly, Mr.
Tilley had been President and Chief Executive Officer of Halliburton
Geophysical Services, a provider of geophysical products and services to the
oil and gas industry. Mr. Johnson became a Class 2 director to serve the
remainder of Mr. Garrett's term. Mr. Johnson was President of Electric
Submersible Pumps, Inc., a manufacturer of electric submersible pumps and
related products headquartered in Midland, Texas; Electric Submersible Pumps,
Inc. is a company affiliated with the Reporting Person. The term of office of
the Class 1 directors expired at New ERC's next annual meeting of
stockholders; the term of the Class 2 directors expires at the next succeeding
annual meeting; and the terms of the Class 3 directors expires at the next
succeeding annual meeting after the election of the Class 2 directors. In
June 1995, Mr. Rau resigned his position as President and as a director of the
Company; and Wendell Brooks was appointed President of the Company and as a
director to fill Mr. Rau's unexpired term. Mr. Johnson resigned as a director
in January 1996, and Anthony Howells has been appointed to fill his unexpired
term. Mr. Howells is currently a management consultant to oil and gas service
companies and from 1966 to 1991 was employed by Dresser Atlas in various
management positions.
The current directors of the Company are J. Derek P. Jones, Allister G.
Langlands, George W. Tilley, Wendell Brooks and Anthony Howells. By virtue of
four of the directors of New ERC being designees of the Reporting Person,
these designees control all decisions made by the Board of Directors,
including decisions to sell additional securities, enter into financial
arrangements, fill vacancies on the Board of Directors, amend certain of the
Bylaws of New ERC, and approve certain transactions, both with the Reporting
Person and its affiliates and with third parties. Messrs. Jones, Langlands
and Brooks are also officers and/or employees of the Reporting Person (and
certain of its subsidiaries or its affiliates), and there can be no assurance
that conflicts of interest will not arise.
PURCHASE OF QUANTUM SHARES. On March 5, 1996, the Reporting Person and
Quantum entered into a Letter Agreement (the "Letter Agreement"), a copy of
which is attached as Exhibit H hereto, whereby Quantum agreed to sell and the
Reporting Person agreed to purchase an aggregate of an additional 780,000
shares of Common Stock in a privately-negotiated transaction. Pursuant to the
Letter Agreement, the purchase price for such shares of Common Stock was
$0.8125 (13/16) per share (or an aggregate consideration of $633,750).
Pursuant to the Company's Certificate of
Page 8 of 18 Pages
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Incorporation, the purchase was approved by the board of directors of the
Company prior to the execution of the Letter Agreement. The transaction was
conducted entirely between the Reporting Person and Quantum, and, except for
the Letter Agreement, there was no agreement or other documentation prepared
in connection with the transaction. As a result of this sale, the Reporting
Person understands that Quantum no longer owns any shares of Common Stock.
As a result of the purchase of additional shares from Quantum, the
Reporting Person currently owns an aggregate of 7,318,686 shares representing
approximately 52.8% of the outstanding shares of Common Stock of New ERC.
Consequently, the Reporting Person has the power to elect New ERC's Board of
Directors and to approve certain actions requiring stockholder approval,
including a merger or combination of New ERC (with the Reporting Person or
otherwise), a going private transaction, or a sale of all or substantially all
of the Company's assets. See "Charter Provisions" above."
Item 5. Interest in Securities of the Issuer.
Item 5 is hereby amended and restated in its entirety by the following
paragraphs:
"(a), (b) On December 4, 1992, the Reporting Person acquired 6,503,686
shares of Common Stock from the Sellers in accordance with the terms of the
Purchase Agreement. The Reporting Person purchased 6,303,686 shares from
Quantum, 100,000 shares from Mr. Haber, 100,000 shares from Mr. Pohly and a
charity of Mr. Pohly's and 35,000 shares from Mr. Teager. The total 6,538,686
shares purchased by the Reporting Person pursuant to the Purchase Agreement
represented approximately 47.2% of the outstanding shares of Common Stock.
Additionally, as a result of that certain Standstill and Voting Agreement
dated October 15, 1992 entered into by and among the Reporting Person,
Quantum, and the Company, (the "Standstill and Voting Agreement"), and an
irrevocable proxy granted to the Reporting Person by Quantum (See Item 6), the
Reporting Person had the power to direct the vote of all 7,083,686 shares of
common stock of the Company owned by Quantum (i) for the Merger (provided that
holders of a majority of the Public Shares present in person or by proxy at
the Annual Meeting voted for the Merger proposal) and (ii) for the Reporting
Person's designees to the Company's Board of Directors (and against their
removal by Company stockholders other than the Reporting Person).
On March 5, 1996, the Reporting Person and Quantum entered into the Letter
Agreement whereby Quantum agreed to sell and the Reporting Person agreed to
purchase an aggregate of an additional 780,000 shares of Common Stock in a
privately-negotiated transaction. Pursuant to the Letter Agreement, the
purchase price for such shares of Common Stock was $0.8125 (13/16) per share
(or an aggregate consideration of $633,750). Pursuant to the Company's
Certificate of Incorporation, the purchase was approved by the board of
directors of the Company prior to the execution of the Letter Agreement. The
transaction was conducted entirely between the Reporting Person and Quantum,
and, except for the Letter Agreement, there was no agreement or other
documentation prepared in connection with the transaction. As a result of the
purchase, the Reporting Person currently owns an aggregate of 7,318,686 shares
representing approximately 52.8% of the outstanding shares of Common Stock of
New ERC. Consequently, the Reporting Person has the power to elect New ERC's
Board of Directors and to approve certain actions requiring stockholder
approval, including a merger or combination of New ERC (with the Reporting
Person or otherwise), a going private transaction, or a sale of all or
substantially all of the Company's assets. Additionally, as a result of this
purchase, the Standstill and Voting Agreement terminated effective as of March
5, 1996.
Page 9 of 18 Pages
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(c) Except as otherwise described herein, neither the Reporting Person
nor, to the best of its knowledge, any person whose name is set forth herein
has engaged in any transactions with respect to shares of Common Stock during
the past 60 days.
(d) Not applicable.
(e) Not applicable."
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Item 6 is hereby amended and restated in its entirety by the following
paragraphs:
"On October 15, 1992, the Sellers, along with the Company, entered into
the Purchase Agreement with the Reporting Person whereby the Sellers agreed to
sell, and the Reporting Person agreed to purchase, subject to the terms and
conditions of the Purchase Agreement, an aggregate of 6,538,686 shares of the
Common Stock of the Company (which amount represented approximately 47.16% of
the outstanding shares of common stock of the Company as of October 15, 1992)
for a purchase price of $.75 per share, or $4,904,014.50 in the aggregate.
Under the Purchase Agreement, Quantum agreed to sell to the Reporting Person
6,303,686 shares of Common Stock, and Messrs. Haber, Pohly and Teager agreed
to sell 100,000, 100,000, and 35,000 shares, respectively.
Pursuant to the Standstill and Voting Agreement, Quantum agreed for a
period commencing on the date of the Standstill and Voting Agreement and
continuing for three years plus ninety days following the consummation of the
transactions described in the Purchase Agreement, not to effect any
transaction with respect to any of the shares of Common Stock retained by it
or any interest therein, without the prior written consent of the Board of
Directors of the Company, if the transaction may result in the Company being
subject to the limitations on the use of the Company's net operating losses
pursuant to Section 382 of the Internal Revenue Code of 1986 (the "Code").
These transactions included, but were not limited to (a) any sale, conveyance,
transfer or entering into any agreement to sell or convey any of such retained
shares; (b) any grant of any warrants, options, rights, convertible debt
instruments or other securities which are exercisable for, convertible into or
exchangeable for any or all of such retained shares, or other similar
interests or rights in such shares; or (c) any conveyance, transfer or other
disposition of its retained shares or any interest in its retained shares in
any transaction or series of transactions which would or may be treated as a
sale, conveyance, transfer or disposition for purposes of Section 382 of the
Code or the regulations promulgated thereunder. See "Item 4 - Consummation of
the Original Purchase" above.
Quantum also agreed that, for a period of four years following
consummation of the transactions described in the Purchase Agreement or until
such earlier date that Quantum ceases to be the beneficial owner of voting
stock of the Company, it would vote its shares of Common Stock for the
Reporting Person designees for election or appointment to the Board of
Directors.
The Standstill and Voting Agreement terminated as of March 5, 1996.
On December 4, 1992, the Reporting Person acquired 6,503,686 shares of
Common Stock from the Sellers in accordance with the terms of the Purchase
Agreement. The total 6,538,686 shares purchased by the Reporting Person and
which the Reporting Person had the right to acquire at the time represented
approximately 47.2% of the outstanding shares of Common Stock. See "Item 4 -
Consummation of the Original Purchase" and "Merger Approval" above.
Page 10 of 18 Pages
<PAGE>
The Company, the Reporting Person and Steven J. Gilbert, Gary S.
Gladstein, Warren H. Haber, Gerard E. Manolovici, and Richard H. Rau (the
"Indemnitees") further agreed that for a period of five years from December 4,
1992, the Reporting Person would use its best efforts to, and the Company
would, maintain in effect one or more directors' and officers' liability
policies providing coverage for each of the Indemnitees with respect to acts
or omissions occurring on or prior to their dates of resignation on no less
favorable terms than the insurance coverage maintained by the Company;
provided that such coverage was available at commercially reasonable rates,
but in any event, such coverage was provided in an amount not less than that
which was obtainable for the premium amounts which the Company paid. In
addition, for the same period, the Reporting Person agreed that it would use
its best efforts to cause the Company to, and the Company agreed to, not
amend, alter, modify or change the provisions of the Company's Certificate of
Incorporation and Bylaws relating to indemnification of directors and officers
as in effect on December 4, 1992, unless such amendment provided broader
indemnification rights to its then-current and former officers and directors
than prior law permitted the Company to provide.
Additionally, the Purchase Agreement contemplated that the Sellers would
use their best efforts to cause the resignations of four current directors of
the Company and cause the board of directors of the Company to select four
designees of the Reporting Person to fill the vacancies caused by such
resignations. See "Item 4 - Consummation of the Original Purchase" above.
J. Derek P. Jones, a director of the Reporting Person (who was elected as
a director of the Company in order to fill the vacancy created by the
resignation of Gary S. Gladstein effective as of January 8, 1993), was also
appointed as a proxy to vote the shares held by Quantum under the terms of the
irrevocable proxy dated October 15, 1992 granted by Quantum to the Reporting
Person.
As a result of the Merger, the Certificate of Incorporation of the Company
contains certain stock transfer restrictions in order to seek to preserve the
Company's net operating losses available for carryforward (the "NOL
Carryforwards"). The Certificate of Incorporation of the Company provides
that no person who, as a result of any attempted transfer of Common Stock of
the Company having a fair market value equal to 5% or more of the aggregate
fair market value of the outstanding shares of the Company's Common Stock, may
acquire shares of the Company's Common Stock (or options, warrants and rights
or securities exercisable, convertible or exchangeable therefor), unless such
person obtains the approval of the Board of Directors of the Company. Any
attempted transfer with Board approval (or approval of a duly appointed
committee of the Board) will be void and without effect, and the intended
transferee will be deemed to have appointed the Company as exclusive agent to
sell such shares to a transferee eligible to acquire such shares or otherwise
approved by the Board of Directors of New ERC (or a committee thereof). All
proceeds from the sale of such shares shall be remitted to such appointed
transferee. The restriction on transfer will terminate upon the earliest to
occur of (i) December 31, 2002, (ii) the date when the existing NOL
Carryforwards expire or (iii) the date when the NOL Carryforwards become
subject to the limitations of Section 382 of the Code.
On March 5, 1996, the Reporting Person and Quantum entered into the Letter
Agreement whereby Quantum agreed to sell and the Reporting Person agreed to
purchase an aggregate of 780,000 additional shares of Common Stock (which
represented approximately 5.6% of the Common Stock as of December 31, 1995) in
a privately-negotiated transaction. Pursuant to the Letter Agreement, the
purchase price for such shares of Common Stock was $0.8125 (13/16) per share
(or an aggregate consideration of $633,760). The transaction was conducted
entirely between the Reporting Person and Quantum, and, except for the Letter
Agreement, there was no agreement
Page 11 of 18 Pages
<PAGE>
or other documentation prepared in connection with the transaction. The
transaction was approved by the Company's board of directors prior to the
execution of the Letter Agreement.
As a result of the purchase of additional shares from Quantum, the
Reporting Person currently owns an aggregate of 7,318,686 shares representing
approximately 52.8% of the outstanding shares of Common Stock of New ERC.
Consequently, the Reporting Person has the power to elect New ERC's Board of
Directors and to approve certain actions requiring stockholder approval,
including a merger or combination of New ERC (with the Reporting Person or
otherwise), a going private transaction, or a sale of all or substantially all
of the Company's assets."
Item 7. Material to be Filed as Exhibits.
Item 7 is hereby amended and restated in its entirety by the following
paragraphs:
*A Form of proposed Certificate of Ownership and Merger merging ERC
Industries, Inc. into ERC Subsidiary, Inc.
*B Stock Purchase Agreement dated October 15, 1992 among the John Wood Group
PLC, as Purchaser, Quantum Fund, N.V., Warren H. Haber, Lawrence M. Pohly
and John L. Teager, as Sellers, and ERC Industries, Inc.
*C Standstill and Voting Agreement dated October 15, 1992 among John Wood
Group PLC, Quantum Fund, N.V. and ERC Industries, Inc.
*D Irrevocable Proxy executed by Quantum Fund, N.V. to John Wood Group PLC
and J. Derek P. Jones.
*E Notice of Waiver of Conditions to Consummate Purchase Agreement dated
November 30, 1992.
*F Agreement dated December 4, 1992, between the Reporting Person and ERC
Industries, Inc.
*G Agreement dated December 4, 1992, among the Reporting Person, ERC
Industries, Inc., and the Indemnitees.
**H Letter Agreement dated March 5, 1996, between the Reporting Person
and Quantum.
__________________
* Previously filed.
** Filed herewith.
Page 12 of 18 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Amendment No. 6 to Schedule 13D
is true, complete and correct.
Date: March 5, 1996.
JOHN WOOD GROUP PLC
By: /s/ J. DEREK P. JONES
---------------------------
Name: J. Derek P. Jones
Title: Director
Page 13 of 18 Pages
<PAGE>
EXHIBIT INDEX
*A Form of proposed Certificate of Ownership and Merger merging ERC
Industries, Inc. into ERC Subsidiary, Inc.
*B Stock Purchase Agreement dated October 15, 1992 among the John Wood Group
PLC, as Purchaser, Quantum Fund, N.V., Warren H. Haber, Lawrence M. Pohly
and John L. Teager, as Sellers, and ERC Industries, Inc.
*C Standstill and Voting Agreement dated October 15, 1992 among John Wood
Group PLC, Quantum Fund, N.V. and ERC Industries, Inc.
*D Irrevocable Proxy executed by Quantum Fund, N.V. to John Wood Group PLC
and J. Derek P. Jones.
*E Notice of Waiver of Conditions to Consummate Purchase Agreement dated
November 30, 1992.
*F Agreement dated December 4, 1992, between the Reporting Person and ERC
Industries, Inc.
*G Agreement dated December 4, 1992, among the Reporting Person, ERC
Industries, Inc., and the Indemnitees.
**H Letter Agreement dated March 5, 1996, between the Reporting Person
and Quantum.
__________________
* Previously filed.
** Filed herewith.
Page 14 of 18 Pages
<PAGE>
SCHEDULE I
PAGE 1
EXECUTIVE OFFICERS AND DIRECTORS
OF
JOHN WOOD GROUP PLC
NAME AND CAPACITY WITH
JOHN WOOD GROUP PLC
Ian C. Wood C.B.E., LL.D.
Chairman and Managing Director
Edward C. Garrett
Vice Chairman and Director
William H. Carr
Director
William Edgar
Director
Allister G. Langlands
Director and Group Financial
Director
BUSINESS ADDRESS
John Wood House
Greenwell Road
East Tullos
Aberdeen, Scotland
ABI 4AX
John Wood House
Greenwell Road
East Tullos
Aberdeen, Scotland
ABI 4AX
John Wood House
Greenwell Road
East Tullos
Aberdeen, Scotland
ABI 4AX
John Wood House
Greenwell Road
East Tullos
Aberdeen, Scotland
ABI 4AX
John Wood House
Greenwell Road
East Tullos
Aberdeen, Scotland
AB1 4AX
Page 15 of 18 Pages
<PAGE>
SCHEDULE I
PAGE 2
EXECUTIVE OFFICERS AND DIRECTORS
OF
JOHN WOOD GROUP PLC
NAME AND CAPACITY WITH
JOHN WOOD GROUP PLC
Tom Motherwell
Director
J. Derek Prichard-Jones
Director
J. Ramsay Spence O.B.E.
Director
Ewan Brown
Director
C. Nicholas Brown
Group Company Secretary
BUSINESS ADDRESS
John Wood House
Greenwell Road
East Tullos
Aberdeen, Scotland
ABI 4AX
John Wood Group USA, Inc.
16920 Park Row
Houston, Texas 77084
John Wood House
Greenwell Road
East Tullos
Aberdeen, Scotland
ABI 4AX
John Wood House
Greenwell Road
East Tullos
Aberdeen, Scotland
ABI 4AX
John Wood House
Greenwell Road
East Tullos
Aberdeen, Scotland
ABI 4AX
Page 16 of 18 Pages
<PAGE>
SCHEDULE I
PAGE 3
Ian C. Wood C.B.E., LL.P.
Mr. Wood's principal occupation is Chairman and Managing Director of John Wood
Group PLC. Mr. Wood is also chairman and Managing Director of J.W. Holdings
Ltd.
Edwin C. Garrett.
Mr. Garrett's principal occupation is Vice Chairman of John Wood Group PLC and
Managing Director of J.W. Holdings Ltd.
William H. Carr.
Mr. Carr's principal occupation is serving as Managing Director of Wood
Group's Fire and Safety activities.
William Edgar.
Mr. Edgar's principal occupation is serving as Managing Director of Wood
Group's Engineering and Logistics activities.
Allister G. Langlands.
Mr. Langlands' principal occupation is Group Financial Director of John Wood
Group PLC.
Tom Motherwell.
Mr. Motherwell's principal occupation is serving as Managing Director of Wood
Group's Gas Turbine activities.
Page 17 of 18 Pages
<PAGE>
SCHEDULE I
PAGE 4
J. Derek Prichard-Jones.
Mr. Jones' principal occupation is serving as director of John Wood Group PLC
and as President of Wood Group USA, Inc., an indirect wholly-owned subsidiary
of John Wood Group PLC located in Houston, Texas performing administrative
services for John Wood Group PLC's U.S. operations. Mr. Jones also serves in
various other capacities for other subsidiaries and affiliates of John Wood
Group PLC, and in his capacity as Managing Director of the Group's Drilling
and Production Services Division.
J. Ramsay Spence O.B.E.
Mr. Spence's principal occupation is serving as Group Director responsible
for Safety, Environment and Quality.
Ewan Brown.
Mr. Brown's principal occupation is serving as Director of Noble Grossart
Ltd., a merchant bank operating in Edinburgh.
C. Nicholas Brown.
Mr. Brown's principal occupation is Group Company Secretary of John Wood Group
PLC, and serving as secretary of John Wood Group PLC's United Kingdom-based
subsidiary companies, having principal responsibility for the group's legal,
contractual and company secretarial matters.
Page 18 of 18 Pages
<PAGE>
EXHIBIT H
QUANTUM GROUP OF FUNDS
BY COURIER
March 5, 1996
Arthur Nathan, Esq.
Haynes & Boone
1000 Louisiana
Suite 4300
Houston, TX 77002-5012
RE: SALE OF 780,000 SHARES OF ERC INDUSTRIES, INC.
Dear Arthur:
This is to confirm our understanding that your client, John Wood Group PLC, has
agreed to purchase from Quantum Fund N.V. ("Quantum") 780,000 shares of ERC
Industries, Inc. ("ERC") at a purchase price per share of $13/16, for a total
consideration of $633,750.00. This amount should be transferred by wire by
Tuesday, March 5, 1996 pursuant to the following account information:
The Bank of New York
ABA #: 021-000018
Account #: 8540-90-5100
Account Name: Arnhold and S. Bleichroeder
F/A/O: Quantum Partners LDC
Attention: Robert Miller
Please find enclosed a copy of a set of resolutions adopted by Quantum in which
it is resolved to sell 780,000 shares of ERC to John Wood Group PLC pursuant to
the terms described above and to deliver stock certificates representing a total
of 780,000 shares, as well as a copy of a power of attorney authorizing me, as
well as certain other employees of Soros Fund Management to act on behalf of
Quantum in connection with this transaction.
Also enclosed are stock certificates representing ownership of 295,170 and
42,102 shares of ERC by Quantum and Quantum Overseas N.V., respectively. Quantum
Overseas N.V. was a subsidiary of Quantum and has since been liquidated, Quantum
being its successor. Also enclosed are two stock powers authorizing the transfer
of an aggregate of 780,000 shares of ERC to John Wood Group PLC. As we
discussed, a certificate representing the balance of the shares currently owned
by Quantum (442,728 shares) is in the process of being produced by DTC and we
expect to have it by the middle of next week. It will be forwarded to you once
we have received it.
QUANTUM GROUP OF FUNDS
KAYA FLAMBOYAN 9 . WILLEMSTAD, CURACAO . NETHERLANDS ANTILLES
TELEPHONE: 5999 322422 . TELEX: 3445 CITCO NA . FAX 5999 322420
<PAGE>
Page 2
Kindly confirm that this letter accurately reflects our entire understanding by
signing and returning a counterpart of this letter.
QUANTUM FUND N.V.
By: /s/ Michael C. Neus
------------------------
Name: Michael C. Neus
Title: Attorney-in-Fact
Acknowledged and confirmed on behalf
of John Wood Group PLC
By: /s/ Arthur Nathan
-----------------------------------
Name: Arthur Nathan
Title: Attorney
