UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 4)
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
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
April 28, 1998
------------------------------------------------
(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 31 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Goldman, Sachs & Co.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF,OO
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 EACH 1,020,101
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
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)
15.1%
14 TYPE OF REPORTING PERSON*
BD-PN-IA
SCHEDULE 13D
CUSIP No. 756269106 Page 3 of 31 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
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*
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 5,000
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 1,020,101
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 5,000
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)
15.2%
14 TYPE OF REPORTING PERSON*
HC-PN
SCHEDULE 13D
CUSIP No. 756269106 Page 4 of 31 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
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 EACH 633,767
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
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)
9.9%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP No. 756269106 Page 5 of 31 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
GS Capital Partners 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 EACH 251,948
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
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)
4.2%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP No. 756269106 Page 6 of 31 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
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 EACH 23,376
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
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)
0.4%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP No. 756269106 Page 7 of 31 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
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 EACH 633,767
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
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)
9.9%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP No. 756269106 Page 8 of 31 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
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 EACH 251,948
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
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)
4.2%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP No. 756269106 Page 9 of 31 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Goldman, Sachs & Co. oHG
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
Germany
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 23,376
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
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)
0.4%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP No. 756269106 Page 10 of 31 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
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 EACH 60,191
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
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)
1.0%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP No. 756269106 Page 11 of 31 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
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 EACH 40,819
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
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)
0.7%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP No. 756269106 Page 12 of 31 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
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 EACH 101,010
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
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)
1.7%
14 TYPE OF REPORTING PERSON*
CO
This Amendment No. 4 (this "Amendment No. 4") 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")(FN1) 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, Amendment No. 2 to the Original Schedule 13D filed by the
Filing Persons on April 29, 1997 and Amendment No. 3 to the Original
Schedule 13D filed by the Filing Persons on October 2, 1997, in respect of
the Common Stock, par value $0.01 per share (the "Common Stock"), of
Recovery Engineering, Inc., a Minnesota corporation (the "Company"). This
Amendment No. 4 is being filed primarily to report a decrease in the
percentage of the shares of Common Stock beneficially owned by (or which
may be deemed to be beneficially owned by) the Filing Persons as a result
of the issuance by the Company of 1,190,000 additional shares of Common
Stock pursuant to a public offering consummated on April 28, 1998 (the
"Public Offering"). The Filing Persons have not sold or otherwise disposed
of any shares of Common Stock or any of the Notes of the Company.
Capitalized terms used but not defined herein shall have the respective
meanings given to them in the Original Schedule 13D.
- ------------------
[FN]
1 Neither the Original Schedule 13D, Amendment No. 1, Amendment No. 2,
Amendment No. 3 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>
Schedules II-A-i, II-A-ii and II-A-iii attached hereto are hereby
substituted for Schedules II-A-i, II-A-ii and II-A-iii, respectively,
attached to the Original Schedule 13D, as amended. Each reference to
Schedules II-A-i, II-A-ii and II-A-iii contained in the Original Schedule
13D, as amended, shall be deemed to be a reference to Schedules II-A-i,
II-A-ii and II-A-iii, respectively, hereto.
ITEM 2. Identity 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 April 29, 1998, (a) Goldman Sachs may be deemed to own
beneficially 1,020,101 shares of Common Stock, in the aggregate,
by reason of (i) 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) there being 10,000 shares of Common Stock
in the aggregate in client accounts with respect to which Goldman
Sachs or employees of Goldman Sachs have voting or investment
discretion, or both (collectively, the "Managed Accounts"), and
(b) GS Group may be deemed to own beneficially 1,025,101 shares
of Common Stock, in the aggregate, by reason of (i) the ownership
by the Limited Partnerships of the Notes, (ii) Mr. Sanjay H.
Patel, a former 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 while he was a Managing
Director of Goldman Sachs and the designee of the Limited
Partnerships to the Board of Directors of the Company) to
purchase 5,000 shares of Common Stock (the "Patel Options") (see
Item 4) and (iii) 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.
ITEM 4. Purpose of Transaction
As of January 16, 1998, Mr. Sanjay H. Patel ceased to be a
Managing Director of Goldman Sachs and the designee of the
Limited Partnerships to the Board of Directors of the Company.
Although no longer the designee of the Limited Partnerships, as
of the date of this Amendment No. 4, Mr. Patel remains a director
of the Company. Pursuant to the Patel/GS Group Agreement
(attached as an Exhibit to Amendment No. 1), Mr. Patel continues
to hold the Patel Options, and each share of Common Stock
issuable upon exercise thereof, in trust for the benefit of GS
Group.
As of February 3, 1998, Mr. Robert R. Gheewalla, an
Associate in the Principal Investment Area of Goldman Sachs, was
elected to the Board of Directors of the Company as the designee
of the Limited Partnerships. Mr. Gheewalla, in his capacity as a
director of the Company, has received options to purchase 4,000
shares of Common Stock. The options are not presently
exercisable. Pursuant to an agreement between Mr. Gheewalla and
GS Group, Mr. Gheewalla holds the options, and each share of
Common Stock issuable upon exercise thereof, in trust for the
benefit of GS Group.
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:
The number of shares of Common Stock beneficially owned by
(or which may be deemed beneficially owned by) the Filing Persons
has not changed, although by reason of the issuance by the
Company of 1,190,000 shares of Common Stock pursuant to the
Public Offering, the percentage of the shares of Common Stock
beneficially owned by (or which may be deemed to be beneficially
owned by) the Filing Persons has decreased. As of April 29, 1998,
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 outstanding after giving effect
to the Public Offering (as disclosed to the Filing Persons by the
Company on April 28, 1998), as of April 29, 1998, GSCP
beneficially owned, and GS Advisors may be deemed to have
beneficially owned, approximately 9.9%, GSCP II Offshore
beneficially owned, and GS Advisors Cayman may be deemed to have
beneficially owned, approximately 4.2%, GSCP II Germany
beneficially owned, and GS oHG may be deemed to have beneficially
owned, approximately 0.4%, Stone Street beneficially owned
approximately 1.0%, Bridge Street beneficially owned
approximately 0.7%, and Empire Corp. may be deemed to have
beneficially owned approximately 1.7%, in each case of the
outstanding 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 April 29, 1998, (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
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 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 its rights to the Patel Options (and the shares of
Common Stock issuable upon exercise thereof), and (iii) by reason
of there being 10,000 shares of Common Stock in the Managed
Accounts. Accordingly, as of April 29, 1998, Goldman Sachs may be
deemed to beneficially own approximately 15.1% of the shares of
Common Stock, and GS Group may be deemed to beneficially own
15.2% 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 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer
In connection with the Public Offering, each of the Limited
Partnerships has agreed, pursuant to a Letter Agreement (the
"Letter Agreement"), dated February 23, 1998, among NationsBanc
Montgomery Securities LLC ("NationsBanc"), Deutsche Morgan
Grenfell Inc. and each of the Limited Partnerships that, for a
period of 120 days from April 23, 1998, it will not, without the
prior written consent of NationsBanc, offer, sell, contract to
sell or otherwise dispose of (or announce its intention to do any
of the foregoing) any shares of Common Stock or any securities
convertible into, or exercisable or exchangeable for, shares of
Common Stock. A copy of the Letter Agreement is attached hereto
as Exhibit (1).
ITEM 7. Materials to be Filed as Exhibits
(1) Letter Agreement, dated February 23, 1998, among
NationsBanc Montgomery Securities LLC, Deutsche Morgan Grenfell
Inc. and the Limited Partnerships.
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: April 30, 1998 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
SCHEDULE II-A-i
The name, position and present principal occupation of each director
and executive officer of GS Advisors, Inc., the sole general partner of GS
Advisors, L.P., which is the sole general partner of GS Capital Partners
II, L.P., are set forth below.
The business address of each of the executive officers and directors
listed below, except Henry Cornell and Barry S. Volpert, is 85 Broad
Street, New York, New York 10004. The business address of Henry Cornell is
3 Garden Road, Hong Kong. The business address of Barry S. Volpert is 133
Fleet Street, London EC4A 2BB, England.
All executive officers and directors listed below are United States
citizens.
Present
Name Position Principal Occupation
---- -------- --------------------
Richard A. Friedman Director/President Managing Director of
Goldman, Sachs & Co.
Terence M. O'Toole Director/Vice President Managing Director of
Goldman, Sachs & Co.
Elizabeth S. Cogan Treasurer Managing Director of
Goldman, Sachs & Co.
Joseph H. Gleberman Director/Vice President Managing Director of
Goldman, Sachs & Co.
Henry Cornell Vice President Managing Director of
Goldman Sachs (Asia)
L.L.C.
Barry S. Volpert Director/Vice President Managing Director of
Goldman Sachs
International
Eve M. Gerriets Vice President/Secretary Vice President of
Goldman, Sachs & Co.
David J. Greenwald Assistant Secretary Vice President of
Goldman, Sachs & Co.
C. Douglas Fuge Assistant Treasurer Managing Director of
Goldman, Sachs & Co.
Katherine B. Enquist Vice President Vice President of
Goldman, Sachs & Co.
SCHEDULE II-A-ii
The name, position and present principal occupation of each director
and executive officer of GS Advisors II, Inc., the sole general partner of
GS Advisors II (Cayman), L.P., which is the sole general partner of GS
Capital Partners II Offshore, L.P., are set forth below.
The business address of each of the executive officers and directors
listed below except Henry Cornell and Barry S. Volpert is 85 Broad Street,
New York, New York 10004. The business address of Henry Cornell is 3 Garden
Road, Hong Kong. The business address of Barry S. Volpert is 133 Fleet
Street, EC4A 2BB, England.
All executive officers and directors listed below are United States
citizens.
Present
Name Position Principal Occupation
---- -------- --------------------
Richard A. Friedman Director/President Managing Director of
Goldman, Sachs & Co.
Terence M. O'Toole Director/Vice President Managing Director of
Goldman, Sachs & Co.
Elizabeth S. Cogan Treasurer Managing Director of
Goldman, Sachs & Co.
Joseph H. Gleberman Director/Vice President Managing Director of
Goldman, Sachs & Co.
Henry Cornell Vice President Managing Director of
Goldman Sachs (Asia)
L.L.C.
Barry S. Volpert Director/Vice President Managing Director of
Goldman Sachs
International
Eve M. Gerriets Vice President/Secretary Vice President of
Goldman, Sachs & Co.
David J. Greenwald Assistant Secretary Vice President of
Goldman, Sachs & Co.
C. Douglas Fuge Assistant Treasurer Managing Director of
Goldman, Sachs & Co.
Katherine B. Enquist Vice President Vice President of
Goldman, Sachs & Co.
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 Fund 1996, L.P., are set forth below.
The business address of 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.
Present
Name Position Principal Occupation
---- -------- --------------------
Richard A. Friedman Director/Vice President Managing Director of
Goldman, Sachs & Co.
Jeffrey B. Goldenberg Director/Vice President Managing Director of
Goldman, Sachs & Co.
William J. McMahon Director/Vice President Vice President of
Goldman, Sachs & Co.
Dinakar Singh Director/Vice President Vice President of
Goldman, Sachs & Co.
Jonathan L. Kolatch Director/Vice President Managing Director of
Goldman, Sachs & Co.
Sanjeev K. Mehra Director/Vice President Managing Director of
Goldman, Sachs & Co.
Eric M. Mindich Director/Vice President/ Managing Director of
Treasurer Goldman, Sachs & Co.
Peter G. Sachs Director/Vice President Limited Partner of The
Goldman Sachs Group, L.P.
Glenn R. Fuhrman Director/Vice President Managing Director of
Goldman, Sachs & Co.
Peter M. Sacerdote Director/Chairman/C.E.O./ Limited Partner of The
President Goldman Sachs Group, L.P.
David J. Greenwald Vice President Vice President of
Goldman, Sachs & Co.
Esta E. Stecher Vice President Managing Director of
Goldman, Sachs & Co.
Richard A. Yacenda Vice President Vice President of
Goldman, Sachs & Co.
C. Douglas Fuge Assistant Treasurer Managing Director of
Goldman, Sachs & Co.
Eve M. Gerriets Vice President/Secretary Vice President of
Goldman, Sachs & Co.
Katherine B. Enquist Vice President Vice President of
Goldman, Sachs & Co.
EXHIBIT INDEX
Exhibit No. Exhibit
(1) Letter Agreement, dated February 23, 1998, among
NationsBanc Montgomery Securities LLC, Deutsche Morgan
Grenfell Inc. and the Limited Partnerships.
Exhibit 1
2/23/98
NationsBanc Montgomery Securities LLC
Deutsche Morgan Grenfell Inc.
c/o NationsBanc Montgomery Securities LLC
600 Montgomery Street
San Francisco, CA 94111
RE: Recovery Engineering, Inc. (the "Company")
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
Common Stock of the Company ("Common Stock") or securities convertible into
or exchangeable or exercisable for Common Stock. The Company proposes to
carry out a public offering of Common Stock (the "Offering") for which you
will act as the underwriters. The undersigned recognizes that the Offering
will be of benefit to the undersigned and will benefit the Company by,
among other things, raising additional capital for its operations. The
undersigned acknowledges that you and the other underwriters are relying on
the representations and agreements of the undersigned contained in this
letter in carrying out the Offering and in entering into underwriting
arrangements with the Company with respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of NMSI (which
consent may be withheld in its sole discretion), directly or indirectly,
sell, offer, contract or grant any option to sell (including without
limitation any short sale), pledge, transfer, establish an open "put
equivalent position" within the meaning of Rule 16a-1(h) under the
Securities Exchange Act of 1934, or otherwise dispose of any shares of
Common Stock, options or warrants to acquire shares of Common Stock, or
securities exchangeable or exercisable for or convertible into shares of
Common Stock currently owned either of record or beneficially (as defined
in Rule 13d-3 under Securities Exchange Act of 1934, as amended) by the
undersigned or publicly announce the undersigned's intention to do any of
the foregoing, for a period commencing on the date hereof and continuing
through the close of trading on the date 120 days after the date of the
final Prospectus relating to the Offering. The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company's
transfer agent and registrar against the transfer of shares of Common Stock
or securities convertible into or exchangeable or exercisable for Common
Stock held by the undersigned except in compliance with the foregoing
restrictions.
With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of any Common
Stock owned either of record or beneficially by the undersigned, including
any rights to receive notice of the Offering. This agreement is irrevocable
and will be binding on the undersigned and the respective successors,
heirs, personal representatives, and assigns of the undersigned. This
agreement shall terminate automatically and be of no further force or
effect in the event that the contemplated Offering is not consummated on or
prior to June 1, 1998.
GS Capital Partners II, L.P.
----------------------------
Printed Name of Holder
By: GS ADVISORS, INC.
GENERAL PARTNER
By: GS ADVISERS, L.P.
GENERAL PARTNER
By: /s/ Richard A. Friedman
-----------------------
Richard A. Friedman
-------------------
Printed Name of Person Signing
(AND INDICATE CAPACITY OF PERSON
SIGNING IF SIGNING AS CUSTODIAN,
TRUSTEE, OR ON BEHALF OF AN ENTITY)
With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of any Common
Stock owned either of record or beneficially by the undersigned, including
any rights to receive notice of the Offering. This agreement is irrevocable
and will be binding on the undersigned and the respective successors,
heirs, personal representatives, and assigns of the undersigned. This
agreement shall terminate automatically and be of no further force or
effect in the event that the contemplated Offering is not consummated on or
prior to June 1, 1998.
GS Capital Partners II Offshore, L.P.
-------------------------------------
Printed Name of Holder
By: GS ADVISERS II (CAYMAN), L.P.
GENERAL PARTNER
By: GS ADVISERS I, INC.
GENERAL PARTNER
By: /s/Richard A. Friedman
-----------------------
Signature
Richard A. Friedman
-------------------
Printed Name of Person Signing
(AND INDICATE CAPACITY OF PERSON
SIGNING IF SIGNING AS CUSTODIAN,
TRUSTEE, OR ON BEHALF OF AN ENTITY)
With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of any Common
Stock owned either of record or beneficially by the undersigned, including
any rights to receive notice of the Offering. This agreement is irrevocable
and will be binding on the undersigned and the respective successors,
heirs, personal representatives, and assigns of the undersigned. This
agreement shall terminate automatically and be of no further force or
effect in the event that the contemplated Offering is not consummated on or
prior to June 1, 1998.
Goldman, Sachs & Co. Verwaltungs GmbH
-------------------------------------
Printed Name of Holder
By: /s/ Eve M. Gerriets
-------------------
Signature
Eve M. Gerriets
---------------
Printed Name of Person Signing
(AND INDICATE CAPACITY OF PERSON
SIGNING IF SIGNING AS CUSTODIAN,
TRUSTEE, OR ON BEHALF OF AN ENTITY)
With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of any Common
Stock owned either of record or beneficially by the undersigned, including
any rights to receive notice of the Offering. This agreement is irrevocable
and will be binding on the undersigned and the respective successors,
heirs, personal representatives, and assigns of the undersigned. This
agreement shall terminate automatically and be of no further force or
effect in the event that the contemplated Offering is not consummated on or
prior to June 1, 1998.
Stone Street Fund 1996, L.P
Printed Name of Holder
By: STONE STREET EMPIRE CORP.
GENERAL PARTNER
By: /s/ Richard A. Friedman
-----------------------
Signature
Richard A. Friedman
-------------------
Printed Name of Person Signing
(AND INDICATE CAPACITY OF PERSON
SIGNING IF SIGNING AS CUSTODIAN,
TRUSTEE, OR ON BEHALF OF AN ENTITY)
With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of any Common
Stock owned either of record or beneficially by the undersigned, including
any rights to receive notice of the Offering. This agreement is irrevocable
and will be binding on the undersigned and the respective successors,
heirs, personal representatives, and assigns of the undersigned. This
agreement shall terminate automatically and be of no further force or
effect in the event that the contemplated Offering is not consummated on or
prior to June 1, 1998.
BRIDGE STREET FUND 1996. L.P.
-----------------------------
Printed Name of Holder
BY: STONE STREET EMPIRE CORP.
MANAGING GENERAL PARTNER
By: /s/ Richard A. Friedman
-----------------------
Signature
Richard A. Friedman
-------------------
Printed Name of Person Signing
(AND INDICATE CAPACITY OF PERSON
SIGNING IF SIGNING AS CUSTODIAN,
TRUSTEE, OR ON BEHALF OF AN ENTITY)
