UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)
RECOVERY ENGINEERING, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
- --------------------------------------------------------------------------------
(Title of Class of Securities)
756269106
---------------------------------------------
(CUSIP Number)
DAVID J. GREENWALD, ESQ.
GOLDMAN, SACHS & CO.
85 BROAD STREET
NEW YORK, NY 10004
(212) 902-1000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
October 1, 1997
---------------------------------------------
(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 [ ].
SCHEDULE 13D
CUSIP NO. 756269106 Page 2 of 22
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Goldman, Sachs & Co.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) | |
(b) | |
3 SEC USE ONLY
4 SOURCE OF FUNDS
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) |X|
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 1,020,101
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
WITH 10 SHARED DISPOSITIVE POWER
1,020,101
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,020,101
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
| |
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.4%
14 TYPE OF REPORTING PERSON
BD-PN-IA
SCHEDULE 13D
CUSIP NO. 756269106 Page 3 of 22
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Goldman Sachs Group, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) | |
(b) | |
3 SEC USE ONLY
4 SOURCE OF FUNDS
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) | |
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 5,000
BENEFICIALLY 8 SHARED VOTING POWER
1,020,101
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 5,000
WITH 10 SHARED DISPOSITIVE POWER
1,020,101
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,025,101
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
| |
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.5%
14 TYPE OF REPORTING PERSON
HC-PN
SCHEDULE 13D
CUSIP NO. 756269106 Page 4 of 22
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GS Capital Partners II, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) | |
(b) | |
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) | |
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 633,767
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
WITH 10 SHARED DISPOSITIVE POWER
633,767
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
633,767
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
| |
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.3%
14 TYPE OF REPORTING PERSON
PN
SCHEDULE 13D
CUSIP NO. 756269106 Page 5 of 22
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GS Capital Partners II Offshore, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) | |
(b) | |
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) | |
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 251,948
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
WITH 10 SHARED DISPOSITIVE POWER
251,948
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
251,948
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
| |
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.3%
14 TYPE OF REPORTING PERSON
PN
SCHEDULE 13D
CUSIP NO. 756269106 Page 6 of 22
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GS Capital Partners II (Germany) Civil Law Partnership (with
limitation of liability)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) | |
(b) | |
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) | |
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Germany
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 23,376
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
WITH 10 SHARED DISPOSITIVE POWER
23,376
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
23,376
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
| |
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.5%
14 TYPE OF REPORTING PERSON
PN
SCHEDULE 13D
CUSIP NO. 756269106 Page 7 of 22
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GS Advisors, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) | |
(b) | |
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) | |
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 633,767
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
WITH 10 SHARED DISPOSITIVE POWER
633,767
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
633,767
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
| |
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.3%
14 TYPE OF REPORTING PERSON
PN
SCHEDULE 13D
CUSIP NO. 756269106 Page 8 of 22
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GS Advisors II (Cayman), L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) | |
(b) | |
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) | |
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 251,948
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
WITH 10 SHARED DISPOSITIVE POWER
251,948
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
251,948
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
| |
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.3%
14 TYPE OF REPORTING PERSON
PN
SCHEDULE 13D
CUSIP NO. 756269106 Page 9 of 22
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Goldman, Sachs & Co. oHG
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A G (a) | |
(b) | |
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) | |
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Germany
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 23,376
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
WITH 10 SHARED DISPOSITIVE POWER
23,376
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
23,376
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
| |
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.5%
14 TYPE OF REPORTING PERSON
PN
SCHEDULE 13D
CUSIP NO. 756269106 Page 10 of 22
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Stone Street Fund 1996, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) | |
(b) | |
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) | |
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 60,191
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
WITH 10 SHARED DISPOSITIVE POWER
60,191
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
60,191
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
| |
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.3%
14 TYPE OF REPORTING PERSON
PN
SCHEDULE 13D
CUSIP NO. 756269106 Page 11 of 22
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Bridge Street Fund 1996, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) | |
(b) | |
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 40,819
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
WITH 10 SHARED DISPOSITIVE POWER
40,819
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
40,819
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
| |
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.9%
14 TYPE OF REPORTING PERSON
PN
SCHEDULE 13D
CUSIP NO. 756269106 Page 12 of 22
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Stone Street Empire Corp.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) | |
(b) | |
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) | |
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 101,010
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
WITH 10 SHARED DISPOSITIVE POWER
101,010
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
101,010
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
| |
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.2%
14 TYPE OF REPORTING PERSON
CO
This Amendment No. 3 (this "Amendment No. 3") is being filed by GS
Capital Partners II, L.P. ("GSCP"), GS Capital Partners II Offshore, L.P. ("GSCP
II Offshore"), GS Capital Partners II (Germany) Civil Law Partnership (with
limitation of liability) ("GSCP II Germany," and together with GSCP and GSCP II
Offshore, "GSCP II"), GS Advisors, L.P. ("GS Advisors"), GS Advisors II
(Cayman), L.P. ("GS Advisors Cayman"), Goldman, Sachs & Co. oHG ("GS oHG"),
Stone Street Fund 1996, L.P. ("Stone Street"), Bridge Street Fund 1996, L.P.
("Bridge Street," and together with Stone Street, the "Stone/Bridge Funds"),
Stone Street Empire Corp. ("Empire Corp."), Goldman, Sachs & Co. ("Goldman
Sachs") and The Goldman Sachs Group, L.P. ("GS Group," and together with GSCP,
GSCP II Offshore, GSCP II Germany, GS Advisors, GS Advisors Cayman, GS oHG,
Stone Street, Bridge Street, Empire Corp. and Goldman Sachs, the "Filing
Persons")1 to amend and supplement the Statement on Schedule 13D (the "Original
Schedule 13D") filed by the Filing Persons on July 29, 1996, Amendment No. 1 to
the Original Schedule 13D ("Amendment No. 1"), filed by the Filing Persons on
April 9, 1997, and Amendment No. 2 to the Original Schedule 13D filed by the
Filing Persons on April 29, 1997, in respect of the Common Stock ("Amendment No.
2"), par value $0.01 per share (the "Common Stock"), of Recovery Engineering,
Inc., a Minnesota corporation (the "Company"). This Amendment No. 3 is being
filed primarily to report the terms of a letter agreement entered into between
GSCP II, the Stone/Bridge Funds and the Company. Capitalized terms used but not
defined herein shall have the respective meanings given to them in the Original
Schedule 13D.
Schedule II-A-iii hereto is hereby substituted for Schedule
II-A-iii attached to Amendment No. 1. Each reference to Schedule
II-A-iii contained in the Original Schedule 13D, as amended, shall be
deemed to be a reference to Schedule II-A-iii hereto.
ITEM 2. IDENTIFY AND BACKGROUND
Item 2 of the Original Schedule 13D, as amended, is hereby further
amended by substituting for the first paragraph thereof the following paragraph:
As of October 1, 1997, (a) Goldman Sachs may be deemed to
own beneficially 1,020,101 shares of Common Stock, in the
aggregate, (i) by reason of the ownership by GSCP II and the
Stone/Bridge Funds (collectively, the "Limited
Partnerships") of the Notes, which are convertible into
1,010,101 shares of Common Stock, in the aggregate, and (ii)
by reason of there being 10,000 shares of Common Stock, in
the aggregate, in client accounts managed by Goldman Sachs
(collectively, the "Managed Accounts"), and (b) GS Group may
be deemed to own beneficially 1,025,101 shares of Common
Stock, in the aggregate, (i) by reason of the ownership by
the Limited Partnerships of the Notes, (ii) by reason of Mr.
Sanjay H. Patel, a Managing Director of Goldman Sachs,
holding for the benefit of the GS Group, options (received
by him in his capacity as a director of the Company) to
purchase 5,000 shares of Common Stock (the "Directors
Options") and (iii) by reason of there being 10,000 shares
of Common Stock, in the aggregate, in the Managed Accounts.
Goldman Sachs and GS Group each disclaim beneficial
ownership of the shares of Common Stock beneficially owned
by the Limited Partnership to the extent of partnership
interests in the Limited Partnerships held by persons other
than Goldman Sachs, GS Group or their affiliates. Each of
Goldman Sachs and GS Group disclaims beneficial ownership of
the shares of Common Stock in the Managed Accounts.
[FN]
- --------
1 Neither the Original Schedule 13D, Amendment No. 1, Amendment No. 2 nor
anything contained therein or herein shall be construed as an admission
that any Filing Person constitutes a "person" for any purpose other than
Section 13(d) of the Securities Exchange Act of 1934, as amended.
</FN>
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Paragraph (b) of Item 3 of the Original Schedule 13D, as amended, is
hereby supplemented with the following paragraph:
On April 24, 1997, Mr. Sanjay H. Patel, a Managing
Director of Goldman Sachs, in his capacity as a director of
the Company, received, pursuant to the Company's 1993
Director Stock Option Plan and pursuant to a Directors'
Nonqualified Stock Option Agreement entered into between Mr.
Patel and the Company (which Agreement is substantially in
the form of the option agreement attached as Exhibit (1) to
Amendment No. 1), a Director Option, entitling Mr. Patel to
purchase form the Company, at $5.84 per share, 4,000 shares
of Common Stock, in the aggregate, (in addition to the 1,000
shares of Common Stock which Mr. Patel is entitled to
purchase at $11.25 per share pursuant to a Director Option
previously issued to him). Mr. Patel has entered into an
agreement (the "Patel/GS Group Agreement") pursuant to which
Mr. Patel has agreed, among other things, that he holds the
Director Options, and each share of Common Stock issuable
upon exercise thereof, in trust for the benefit of GS Group.
A copy of the Patel/GS Group Agreement is attached as
Exhibit (2) to Amendment No. 1.
ITEM 4. PURPOSE OF TRANSACTION
The Limited Partnerships and the Company have entered into a letter
agreement (a copy of which is attached as Exhibit (1) hereto), dated October 1,
1997, pursuant to which the Limited Partnerships and the Company, agreed
that, notwithstanding the restrictions set forth in the Securities Purchase
Agreement, dated July 19, 1996, between the Company and the Limited
Partnerships, as amended, during the Company's fiscal year ending December 31,
1997, the Company and its subsidiaries may permit to exist an amount of
indebtedness not to exceed $15 million on a consolidated basis.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Paragraph (a) of Item 5 of the Original Schedule 13D, as amended, is
hereby supplemented with the following paragraphs:
As of October 1, 1997, GSCP beneficially owned, and GS
Advisors, by reason of the ownership by GSCP of Notes, may
be deemed to have beneficially owned, 633,767 shares of
Common Stock, GSCP II Offshore beneficially owned, and GS
Advisors Cayman, by reason of the ownership by GSCP II
Offshore of Notes, may be deemed to have beneficially owned,
251,948 shares of Common Stock, GSCP II Germany beneficially
owned, and GS oHG, by reason of the ownership by GSCP II
Germany of Notes, may be deemed to have beneficially owned,
23,376 shares of Common Stock, Stone Street beneficially
owned 60,191 shares of Common Stock, Bridge Street
beneficially owned 40,819 shares of Common Stock, and Empire
Corp., by reason of the ownership by Stone Street and Bridge
Street of Notes, may be deemed to have beneficially owned
101,010 shares of Common Stock. Based on the foregoing and
based on the number of shares of Common Stock reported to be
outstanding in the Quarterly Report on Form 10-Q filed by
the Company for the period ended June 30, 1997, as of
October 1, 1997, GSCP beneficially owned, and GS Advisors
may be deemed to have beneficially owned, approximately
12.3%, GSCP II Offshore beneficially owned, and GS Advisors
Cayman may be deemed to have beneficially owned,
approximately 5.3%, GSCP II Germany beneficially owned, and
GS oHG may be deemed to have beneficially owned,
approximately 0.5%, Stone Street beneficially owned
approximately 1.3%, Bridge Street beneficially owned
approximately 0.9%, and Empire Corp. may be deemed to have
beneficially owned approximately 2.2%, in each case of the
shares of Common Stock. Each of GS Advisors, GS Advisors
Cayman, GS oHG and Empire Corp. disclaims beneficial
ownership of shares of Common Stock beneficially owned by
the Limited Partnerships to the extent of partnership
interests in the Limited Partnerships held by persons other
than GS Advisors, GS Advisors Cayman, GS oHG and Empire
Corp., as applicable.
As of October 1, 1997, (a) Goldman Sachs may be deemed to
beneficially own 1,020,101 shares of Common Stock, in the
aggregate, (i) by reason of the ownership by the Limited
Partnership of the Notes, which are convertible into
1,010,101 shares of Common Stock, in the aggregate, and (ii)
by reason of there being 10,000 shares of Common Stock in
the Managed Accounts, and (b) GS Group may be deemed to own
beneficially 1,025,101 shares of Common Stock, in the
aggregate, (i) by reason of the ownership by the Limited
Partnerships of the Notes, (ii) by reason of Mr. Sanjay H.
Patel, a director of the Company and a Managing Director of
Goldman Sachs, holding for the benefit of GS Group the
Director Options, which are currently exercisable and which
entitle Mr. Patel to purchase 5,000 shares of Common Stock,
in the aggregate, and (iii) by reason of there being 10,000
shares of Common Stock in the Managed Accounts. Accordingly,
as of October 1, 1997, Goldman Sachs may be deemed to
beneficially own approximately 18.4% of the shares of Common
Stock, and GS Group may be deemed to beneficially own 18.5%
of the shares of Common Stock. Goldman Sachs and GS Group
each disclaim beneficial ownership of shares of Common Stock
beneficially owned by the Limited Partnerships to the extent
of partnership interests in the Limited Partnerships held by
persons other than Goldman Sachs, GS Group or their
affiliates. Each of Goldman Sachs and GS Group disclaims
beneficial ownership of the shares of Common Stock held in
the Managed Accounts.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit (1): Letter, dated October 1, 1997, from the Limited
Partnerships to the Company.
SIGNATURE
After reasonable inquiry and to the best of its knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: October 1, 1997 GS CAPITAL PARTNERS II, L.P.
By: GS Advisors, L.P.,
its general partner
By: GS Advisors, Inc.,
its general partner
By: /s/Richard A. Friedman
--------------------------
Name: Richard A. Friedman
Title: President
GS ADVISORS, L.P.
By: GS Advisors, Inc.,
its general partner
By: /s/Richard A. Friedman
--------------------------
Name: Richard A. Friedman
Title: President
GS CAPITAL PARTNERS II OFFSHORE, L.P.
By: GS Advisors II (Cayman), L.P.,
its general partner
By: GS Advisors II, Inc.,
its general partner
By: /s/Richard A. Friedman
--------------------------
Name: Richard A. Friedman
Title: President
GS ADVISORS II (CAYMAN), L.P.
By: GS Advisors II, Inc.,
its general partner
By: /s/Richard A. Friedman
--------------------------
Name: Richard A. Friedman
Title: President
GS CAPITAL PARTNERS II (Germany) CIVIL LAW
PARTNERSHIP (with limitation of liability)
By: Goldman, Sachs & Co. oHG,
its managing partner
By: /s/Richard A. Friedman
--------------------------
Name: Richard A. Friedman
Title: Attorney-in-Fact
GOLDMAN, SACHS & CO. oHG
By: /s/Richard A. Friedman
--------------------------
Name: Richard A. Friedman
Title: Attorney-in-Fact
GOLDMAN, SACHS & CO.
By: /s/Richard A. Friedman
--------------------------
Name: Richard A. Friedman
Title: Managing Director
THE GOLDMAN SACHS GROUP, L.P.
By: The Goldman Sachs Corporation,
its general partner
By: /s/Richard A. Friedman
--------------------------
Name: Richard A. Friedman
Title: Executive Vice President
STONE STREET FUND 1996, L.P.
By: Stone Street Empire Corp.,
its general partner
By: /s/Richard A. Friedman
--------------------------
Name: Richard A. Friedman
Title: Vice President
BRIDGE STREET FUND 1996, L.P.
By: Stone Street Empire Corp.,
its managing general partner
By: /s/Richard A. Friedman
--------------------------
Name: Richard A. Friedman
Title: Vice President
STONE STREET EMPIRE CORP.
By: /s/Richard A. Friedman
--------------------------
Name: Richard A. Friedman
Title: Vice President
INDEX OF EXHIBITS
Exhibit (1): Letter, dated October 1, 1997, from the Limited
Partnerships to the Company.
SCHEDULE II-A-III
The name, position and present principal occupation of each director and
executive officer of Stone Street Empire Corp., the sole general partner of
Stone Street Fund 1996, L.P. and the managing general partner of Bridge Street
1996, L.P., are set forth below.
The business address for each of the executive officers and directors
listed below is 85 Broad Street, New York, New York 10004.
All executive officers and directors listed below are United States
citizens.
NAME POSITION PRESENT
---- -------- PRINCIPAL OCCUPATION
--------------------
Richard A. Friedman Director/President Managing Director of
Goldman, Sachs & Co.
Nash, Avi M. Director/Vice President Managing Director of
Goldman, Sachs & Co.
Goldenberg, Jeffrey Director/Vice President Managing Director of
Goldman, Sachs & Co.
McMahon, J. William Director/Vice President Vice President of
Goldman, Sachs & Co.
Singh, Dinakar Director/Vice President Director/Vice President
of Goldman, Sachs & Co.
Kolatch, Jonathan L. Director/Vice President Managing Director of
Goldman, Sachs & Co.
Mehra, Sanjeev K. Director/Vice President Managing Director of
Goldman, Sachs & Co.
Mindich, Eric M. Director/Vice Managing Director of
President/Treasurer Goldman, Sachs & Co.
Sachs, Peter G. Director/Vice President Limited Partner of The
Goldman Sachs Group, L.P.
Fuhrman, Glenn R. Director/Vice President Vice President of
Goldman, Sachs & Co.
Sacerdote, Peter M. Director/Chairman/C.E.O. Limited Partner of The
President Goldman Sachs Group, L.P
Greenwald, David J. Vice President Vice President of
Goldman, Sachs & Co.
Skondinski, Carla H. Vice President/Secretary Vice President of
Goldman, Sachs & Co.
Stecher, Esta E. Vice President Managing Director of
Goldman, Sachs & Co.
Yacenda, Richard A. Vice President Vice President of
Goldman, Sachs & Co.
Fuge, C. Douglas Assistant Treasurer Managing Director of
Goldman, Sachs & Co.
October 1, 1997
Brian F. Sullivan
Chief Executive Officer
Recovery Engineering, Inc.
2229 Edgewood Avenue South
Minneapolis, MN 55246
Dear Brian:
Reference is made to that certain Securities Purchase Agreement
(as amended, the "Securities Purchase Agreement"), dated as of July
19, 1996, between Recovery Engineering, Inc. (the "Company") and GS
Capital Partners II, L.P., GS Capital Partners II Offshore, L.P.,
Goldman, Sachs & Co. Verwaltungs GmbH, Stone Street Fund 1996, L.P.
and Bridge Street Fund 1996, L.P. (collectively, the "GS Entities"),
as amended by Amendment No. 1 to the Securities Purchase Agreement,
dated March 31, 1996, between the Company and the GSCP Entities and by
that certain letter agreement, dated as April 14, 1997, between the
Company and the GS Entities. Capitalized terms not defined herein
shall have the respective meanings given to them in the Securities
Purchase Agreement.
The GS Entities agree that, notwithstanding Section 6.1(a) of
the Securities Purchase Agreement, solely during the Company's fiscal
year ending December 31, 1997 (the "1997 Fiscal Year"), the Company
and its Subsidiaries may permit to exist Indebtedness not to exceed
$15 million on a consolidated basis. The Company agrees and
acknowledges that, except as specifically provided in the foregoing
sentence, the Company shall be required to be in compliance at all
times with the provisions of Section 6.1(a) of the Securities Purchase
Agreement.
Please execute this letter and the enclosed copy in the space
indicated below and return the enclosed copy to us.
GS CAPITAL PARTNERS II, L.P.
By: GS Advisors, L.P., its general partner
By: GS Advisors, Inc., its general partner
By: /s/Richard A. Friedman
--------------------------------------
Name: Richard A. Friedman
Title: President
GS CAPITAL PARTNERS II OFFSHORE, L.P.
By: GS Advisors II (Cayman), L.P., its general
partner
By: GS Advisors II, Inc., its general partner
By: /s/Richard A. Friedman
--------------------------------------
Name: Richard A. Friedman
Title: President
GOLDMAN, SACHS & CO. VERWALTUNGS GmbH
By: /s/Richard A. Friedman
--------------------------------------
Name: Richard A. Friedman
Title: Managing Director
By: /s/Joseph Gleberman
--------------------------------------
Name: Joseph Gleberman
Title: Managing Director
STONE STREET FUND 1996, L.P.
By: Stone Street Empire Corp., its general
partner
By: /s/Richard A. Friedman
--------------------------------------
Name: Richard A. Friedman
Title: Vice President
BRIDGE STREET FUND 1996, L.P.
By: Stone Street Empire Corp., its managing
general partner
By: /s/Richard A. Friedman
--------------------------------------
Name: Richard A. Friedman
Title: Vice President
Agreed to and accepted
as of the date first above written
RECOVERY ENGINEERING, INC.
By: /s/Brian F. Sullivan
------------------------------
Name: Brian F. Sullivan
Title: Chief Executive Officer
cc: Eric O. Madson
