-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DEkc95ZTv2qzrfrAlGTF2cd3jvSOYrpA4rJK91lTsf0i4QJQC3x1qd37wfUlqbf7 DvUCI6143SBq0ElzfO4+BQ== 0000898430-97-003543.txt : 19970819 0000898430-97-003543.hdr.sgml : 19970819 ACCESSION NUMBER: 0000898430-97-003543 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19970818 SROS: NASD GROUP MEMBERS: FARMERS RICE MILLING COMPANY, INC. GROUP MEMBERS: FIRST GLOBAL SECURITIES, INC. GROUP MEMBERS: NANETTE N. KELLEY GROUP MEMBERS: NOBLE B. TRENHAM GROUP MEMBERS: POWELL GROUP /LA/ SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ERLY INDUSTRIES INC CENTRAL INDEX KEY: 0000030966 STANDARD INDUSTRIAL CLASSIFICATION: GRAIN MILL PRODUCTS [2040] IRS NUMBER: 952312900 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-03507 FILM NUMBER: 97665795 BUSINESS ADDRESS: STREET 1: 10990 WILSHIRE BLVD STREET 2: STE 1800 CITY: LOS ANGELES STATE: CA ZIP: 90024 BUSINESS PHONE: 2138791480 MAIL ADDRESS: STREET 1: 10990 WILSHIRE BOULEVARD STREET 2: SUITE 1800 CITY: LOS ANGELES STATE: CA ZIP: 90024 FORMER COMPANY: FORMER CONFORMED NAME: EARLY CALIFORNIA INDUSTRIES INC DATE OF NAME CHANGE: 19851202 FORMER COMPANY: FORMER CONFORMED NAME: EARLY CALIFORNIA FOODS INC DATE OF NAME CHANGE: 19700114 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: POWELL GROUP /LA/ CENTRAL INDEX KEY: 0001042826 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: LA FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: P O BOX 788 CITY: BATON ROUGE STATE: LA ZIP: 70821 BUSINESS PHONE: 5049224540 MAIL ADDRESS: STREET 1: P O BOX 788 CITY: BATON ROUGE STATE: LA ZIP: 70821 SC 13D/A 1 AMENDMENT #2 TO SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (Rule 13d-101) UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO.2)* ERLY Industries Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock - -------------------------------------------------------------------------------- (Title of Class of Securities) 26883910 -------------------------------------------------- (CUSIP Number) Nanette N. Kelley, The Powell Group, P.O. Box 788, Baton Rouge, Louisiana 70821 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) August 13, 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 [ ] 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. (Continued on following pages) (Page 1 of 18 Pages) *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). - ----------------------- --------------------- CUSIP NO. 26883910 PAGE 2 OF 18 PAGES - ----------------------- --------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON The Powell Group - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [_] (b [x] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ 4 SOURCE OF FUNDS* N/A - ------------------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Louisiana - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 0 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 171,973 OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 0 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 171,933 - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 171,933 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES* 12 - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 13 3.6% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 CO,HC - ------------------------------------------------------------------------------ *SEE INSTRUCTION BEFORE FILLING OUT! SCHEDULE 13D - ----------------------- --------------------- CUSIP NO. 26883910 [ ] PAGE 3 OF 18 PAGES - ----------------------- --------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Farmers Rice Milling Company, Inc. - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [_] (b [x] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ 4 SOURCE OF FUNDS* WC - ------------------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Louisiana - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 171,933 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 171,933 OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 171,933 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 171,933 - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 171,933 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES* 12 - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 13 3.6% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 CO - ------------------------------------------------------------------------------ *SEE INSTRUCTION BEFORE FILLING OUT! SCHEDULE 13D - ----------------------- --------------------- CUSIP NO. 26883910 [ ] PAGE 4 OF 18 PAGES - ----------------------- --------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Nanette N. Kelley - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [_] (b [x] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ 4 SOURCE OF FUNDS* PF - ------------------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 United States - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 16,400 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 188,333 OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 16,400 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 188,333 - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 188,333 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES* 12 [ ] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 13 3.9% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 IN - ------------------------------------------------------------------------------ *SEE INSTRUCTION BEFORE FILLING OUT! SCHEDULE 13D - ----------------------- --------------------- CUSIP NO. 26883910 [ ] PAGE 5 OF 18 PAGES - ----------------------- --------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON First Global Securities, Inc. - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [_] (b [x] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ 4 SOURCE OF FUNDS* WC - ------------------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 California - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 5 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 5 OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 5 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 5 - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 5 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES* 12 [ ] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 13 Less than 1% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 BD/IV - ------------------------------------------------------------------------------ *SEE INSTRUCTION BEFORE FILLING OUT! SCHEDULE 13D - ----------------------- --------------------- CUSIP NO. 26883910 [ ] PAGE 6 OF 18 PAGES - ----------------------- --------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Noble B. Trenham - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [_] (b [x] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ 4 SOURCE OF FUNDS* PF - ------------------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 United States - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 7 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 12 OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 7 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 12 - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 12 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES* [ ] 12 - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 13 Less than 1% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 IN - ------------------------------------------------------------------------------ *SEE INSTRUCTION BEFORE FILLING OUT! This Amendment No. 2 ("Amendment No. 2") amends and supplements the Schedule 13D ("Schedule 13D"), relating to the common stock, $.01 par value per share, of ERLY Industries Inc., a California corporation (the "Company"), previously filed by The Powell Group ("TPG"), Farmers Rice Milling Company, Inc. ("FRM"), Nanette N. Kelley, First Global Securities, Inc. ("Firt Global") and Noble B. Trenham. TPG and FRM are collectively referred to herein as "Powell." 1. Item 2 of the Schedule 13D, "Purpose of Transaction," is hereby amended and restated in its entirety as follows: The Schedule 13D was filed on behalf of TPG and TPG's wholly-owned subsidiary FRM, Ms. Kelley, Mr. Trenham and First Global. Powell, Ms. Kelley, Mr. Trenham and First Global are collectively referred to herein as the "Filing Persons." The filing of the Schedule 13D was not required by Rule 13d-1 under the Securities Exchange Act of 1934. None of the Filing Persons is the owner of more than five percent of the number of shares of Common Stock outstanding (the "Outstanding Common Stock"). Furthermore, if each of the Filing Persons is deemed to have acquired beneficial ownership of the Common Stock owned by each of the other Filing Persons, collectively the Filing Persons would not own more than five percent of the Outstanding Common Stock. However, as more fully described below, the Schedule 13D was filed on behalf of the Filing Persons in anticipation of allegations by the Company that the recent actions the Filing Persons have taken with respect to the Common Stock require such filing. A. THE POWELL GROUP TPG's principal business address is P.O. Box 788, Baton Rouge, Louisiana 70821. Powell is a holding company which owns and operates subsidiaries (including without limitation FRM) engaged in the rice milling, rice farming, rice hull-fired power generation, radio broadcasting, travel management, commercial real estate development and holdings, timber holdings and residential construction businesses. During the last five years, TPG has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and has not been a party to a civil proceeding of a judicial 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. TPG is a successor to Powell Lumber Company, organized in 1896. Since 1917, FRM, formerly a company with common stockholders with TPG and subsequent to 1992 a subsidiary of TPG, has been in the rice milling business. Mr. Willis Page Weber, Ms. Kelley's great-grandfather, was the President of Powell Lumber until his retirement in 1951. Ms. Kelley was elected as a director and subsequently President and Chief Executive Officer in 1991 to succeed her father, A.W. Noland, who resigned. As President and Chief Executive Officer, Ms. Kelley led a restructuring of TPG's business 7 of 18 which occurred over the course of three years. After the restructuring was completed, Ms. Kelley implemented a strategic plan which included selling unprofitable assets, integrating TPG's rice business and real estate business and acquiring positions in the radio broadcast industry. As noted above, TPG's subsidiaries operate presently in the rice milling, rice farming, rice hull-fired power generation, radio broadcasting, travel management and real estate development and holdings, timber holdings and residential construction businesses. Nanette N. Kelley is TPG's President and Chief Executive Officer, John M. Spain is TPG's Managing Director and Mary E. Stampley is Powell's secretary. Ms. Kelley, Mr. Spain and David Pitts are the directors of TPG. The following information is supplied with respect to Ms. Kelley, Mr. Spain, Ms. Stampley and Mr. Pitts. I. (a) Nanette N. Kelley (b) Ms. Kelley's business address is P.O. Box 788, Baton Rouge, Louisiana 70821. (c) Ms. Kelley's principal occupation or employment is serving as TPG's President and Chief Executive Officer. Ms. Kelley is also the President and Chief Executive Officer of FRM. (d)-(e) During the last five years, Ms. Kelley has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and has not been a party to a civil proceeding of a judicial 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. (f) Ms. Kelley is a citizen of the United States. II. (a) John M. Spain (b) Mr. Spain's business address is P.O. Box 788, Baton Rouge, Louisiana 70821. (c) Mr. Spain's principal occupation or employment is serving as TPG's Managing Director. Mr. Spain is also the Managing Director of FRM. (d)-(e) During the last five years, Mr. Spain has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and has not been a party to a civil proceeding of a judicial 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. 8 of 18 (f) Mr. Spain is a citizen of the United States. III. (a) Mary E. Stampley (b) Ms. Stampley's business address is P.O. Box 788, Baton Rouge, Louisiana 70821. (c) Ms. Stampley's principal occupation or employment is serving as TPG's Secretary. Ms. Stampley is also the Secretary of FRM. (d)-(e) During the last five years, Ms. Stampley has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and has not been a party to a civil proceeding of a judicial 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. (f) Ms. Stampley is a citizen of the United States. IV. (a) David Pitts (b) Mr. Pitts' business address is P.O. Box 788, Baton Rouge, Louisiana 70821. (c) Mr. Pitts' principal occupation or employment is serving as President of Pitts Management Associates, a consulting firm. (d)-(e) During the last five years, Mr. Pitts has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and has not been a party to a civil proceeding of a judicial 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. (f) Mr. Pitts is a citizen of the United States. B. FARMERS RICE MILLING COMPANY, INC. FRM's principal business address is P.O. Box 788, Baton Rouge, Louisiana 70821. FRM's principal business is the purchase of rough rice and the milling and sale of rice and rice by-products. During the last five years, FRM has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and has not been a party to a civil proceeding of a judicial 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. 9 of 18 Ms. Kelley is FRM's President and Chief Executive Officer, Mr. Spain is FRM's Managing Director and Ms. Stampley is FRM's Secretary. Ms. Kelley, Mr. Spain and Mr. Pitts are the directors of FRM. Information required to be disclosed in the Schedule 13D about Ms. Kelley, Mr. Spain, Ms. Stampley and Mr. Pitts is contained in A.I. through A.IV. above. C. FIRST GLOBAL SECURITIES, INC./NOBLE B. TRENHAM First Global's principal business address is 790 East Colorado Boulevard, Suite 500, Pasadena, California 91101. First Global is a broker dealer. During the past five years, First Global has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and has not been a party to a civil proceeding of a judicial 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. Noble B. Trenham is First Global's Co-Chairman and Chief Investment Officer. Susan W. Trenham is First Global's Chief Executive Officer and Co-Chairman. The following information is supplied with respect to Mr. Trenham and Ms. Trenham. I. (a) Noble B. Trenham (b) Mr. Trenham's business address is 790 East Colorado Boulevard, Suite 500, Pasadena, California 91101. (c) Mr. Trenham's principal occupation of employment is Co-Chairman and Chief Investment Officer of First Global. (d)-(e) During the last five years, Mr. Trenham has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and has not been a party to a civil proceeding of a judicial 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. On July 23, 1987, the Securities and Exchange Commission filed a civil injunctive action against Mr. Trenham, First Wilshire Securities Management Inc. ("First Wilshire") and Frederick Astman, alleging violations of (i) Section 13(d) of the Securities Exchange Act of 1934 and Rules 13d-1 and 13d-2 promulgated thereunder as a result of First Wilshire's failure to properly and timely disclose its purpose or effect of changing or influencing the control of at least eight public companies while it beneficially owned at least five percent of the outstanding shares of such companies, (ii) Section 206(2) of the Investment Advisers Act of 1940 (the "Advisers Act") regarding (A) the aggregate concentrations of shares accumulated by the defendants in their clients' accounts and failing to disclose to their clients the adverse consequences of such concentrations and (B) the 10 of 18 defendants' failure to disclose multiple instances of conflicts and potential conflicts of interest between First Wilshire and its clients as a result of seeking and, in certain instances, receiving fees from various issuers and entities in which the defendants had invested client funds and (iii) Section 206(3) of the Advisers Act by effecting transactions between a charitable foundation and the foundation's president, both of whom were clients, without statutorily required disclosure or permission. Without admitting or denying the allegations of the complaint, Mr. Trenham, First Wilshire and Mr. Astman each submitted consents to the entry of final judgments permanently enjoining and restraining them from further violations of those provisions of the federal securities laws which they were alleged to have violated. In connection with the entry of the judgment, Mr. Trenham waived, and the court did not enter, any findings of fact or conclusions of law. (f) Mr. Trenham is a citizen of the United States. II. (a) Susan W. Trenham (b) Ms. Trenham's business address is 790 East Colorado Boulevard, Suite 500, Pasadena, California 91101. (c) Ms. Trenham's principal occupation of employment is Chief Executive Officer and Co-Chairman of First Global. (d)-(e) During the last five years, Ms. Trenham has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and has not been a party to a civil proceeding of a judicial 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. (f) Ms. Trenham is a citizen of the United States. 11 of 18 2 . Item 4 of the Schedule 13D, "Purpose of Transaction," is hereby amended and restated in its entirety as follows: On February 12, 1997, Mr. Trenham contacted Ms. Kelley at FRM, as a producer in the rice milling industry, to explore whether Ms. Kelley or FRM would be interested in making an investment in the Company through a private purchase of shares of Common Stock of the Company which Mr. Trenham understood would become available in the near future. Mr. Trenham and First Global have followed the Company for an extended period of time and Mr. Trenham had recommended that a number of his clients invest in the Company. Ms. Kelley ultimately decided to proceed with the purchase and on March 10, 1997 FRM purchased 171,933 shares and Ms. Kelley purchased 16,400 shares. None of TPG, FRM or Ms. Kelley owned shares of Common Stock prior to March 10, 1997. Mr. Trenham and Ms. Kelley also discussed the long term performance of the Company, the possibility of enhancing shareholder value under new management and the extent of shareholder dissatisfaction with current management and its performance. In March 1997, Powell engaged the services of First Global to provide investment banking and financial services in connection with Powell's consideration of a possible consent and/or proxy solicitation with respect to the Common Stock (as described below). During the period from June 9, 1997 through June 16, 1997, Powell and Mr. Trenham met with certain shareholders of the Company to discuss the Company's performance and to ascertain the level of support for a consent/proxy solicitation to replace the board of directors of the Company, if Powell decided to undertake one. Although certain of those shareholders indicated they were inclined to support Powell if it undertook a consent/proxy solicitation, no agreement, arrangement or understanding was reached between Powell and any such shareholders with respect to such support or with respect to any other matters pertaining to the Company or the Common Stock. Each of the Filing Persons expressly disclaims beneficial ownership of any shares of Common Stock other than its, his or her own. A list of names of such shareholders was attached to the Schedule 13D as Annex A. On July 17, 1997 and July 18, 1997, Powell and Mr. Trenham met with or contacted certain shareholders of the Company solely for the purpose of asking them to join Ms. Kelley and 12 of 18 FRM in a request to the Company for a list of shareholders and for a special meeting of shareholders to be held on September 9, 1997. Although certain of those shareholders elected to submit requests to the Company for the list of shareholders and/or for the calling of a special meeting, no agreement, arrangement or understanding was reached between Powell and any such shareholders with respect to acquiring, holding, voting or disposing of Common Stock or any other matters pertaining to the Company or the Common Stock. Certain of the shareholders described in this paragraph are clients of First Global, and therefore, from time to time, call upon Mr. Trenham for advice with respect to matters relating to their shares of Common Stock. Neither Mr. Trenham nor First Global has any discretionary accounts. First Global and Mr. Trenham expressly disclaim beneficial ownership of any Common Stock other than the shares owned by First Global and Mr. Trenham. On July 17, 1997, Powell and Mr. Trenham met with Mr. Gerald D. Murphy, the chief executive officer of the Company, to discuss Powell's desire to enhance shareholder value for the benefit of all shareholders of the Company, the actions taken by Powell, as described above, and Powell's interest in engaging in a consent/proxy solicitation to remove the existing directors and to replace them with Powell's nominees. Mr. William H. Burgess, a director of the Company and the owner of 208,735 shares of Common Stock, was also present at the meeting. Mr. Trenham and Powell had previously met with Mr. Burgess on several occasions regarding the possibility of his supporting Powell's efforts to enhance shareholder value and replace management either by acquiring his shares or by his joining with the Filing Persons in their efforts to achieve these purposes. Mr. Burgess expressed unwillingness to sell his shares or to join with the Filing Persons until a meeting could be held with Mr. Murphy. At the meeting with Mr. Murphy, Ms. Kelley expressed the willingness of Powell to facilitate a sale of the Common Stock owned by Mr. Murphy and his son, Douglas A. Murphy, the President and Chief Operating Officer of the Company. Ms. Kelley also outlined various other terms and conditions including Powell's willingness to allow the Murphys to remain in a consulting capacity for a period of time in order to effect an orderly transition of the Board in the event that the Board and management decided not to resist the proposed consent/proxy solicitation. Mr. Murphy asked for a three week period to consider the proposals and to talk to shareholders. Ms. Kelley indicated that they were prepared to move forward promptly and requested another meeting on July 18, 1997 at 9:00 a.m. At the meeting, Powell also delivered written demands, executed by FRM, Ms. Kelly and certain other shareholders for a list of the Company's shareholders to permit Powell to communicate with other shareholders of the Company and a written consent, with respect to the matters described below, from FRM with respect to 171,933 shares of Common Stock, or 3.6% of the shares outstanding at June 15, 1997, thereby establishing July 17, 1997 as the record date for the consent solicitation described below under applicable California law. On July 18, 1997, Powell and Mr. Trenham met again briefly with Mr. Murphy, who was also accompanied by his lawyer, Mr. Robert H. Goon of Jeffer, Mangels, Butler & Marmaro LLP, and delivered a request to the Company, on behalf of FRM, Ms. Kelley and other shareholders of the Company who in the aggregate own at least ten percent of the outstanding Common Stock, to hold a special meeting of shareholders on September 9, 1997. Mr. Goon, on behalf of Mr. Murphy, stated Mr. Murphy's rejection of Powell's proposals to nominate and/or elect Powell's nominees as directors of the Company and any desire to sell his shares of Common Stock. Mr. Goon, on behalf of the Company, also rejected the form in which the request for the list of 13 of 18 shareholders and request for a special meeting were submitted on the basis that the persons executing the requests, while perhaps beneficial holders, were not the record holders of the shares. Mr. Goon also expressed his view that it appeared that the Filing Persons had violated the federal securities laws. After the meetings on July 17 and 18, through intermediaries, Mr. Murphy indicated a possible willingness to sell to his shares in the Company at a price of $25.00 per share more than twice the stock's trading price. Powell disregarded Mr. Murphy's offer in the belief that it represented neither a realistic proposal (in light of the then current trading price for the stock) nor a good faith offer to sell his shares. As a result, Powell determined to proceed with the consent and proxy solicitation described below. Powell intends to solicit consents from the Company's shareholders in order to remove all members of the present board of directors, amend the Company's bylaws to require the Company to call a special meeting of shareholders to elect directors and make other changes to the bylaws in furtherance of the foregoing. On July 25, 1997, TPG, FRM and Ms. Kelley filed with the Securities and Exchange Commission (the "Commission") a preliminary consent statement on Schedule 14A (the "Consent Statement"), which consent statement solicits consent to action by shareholders of the Company in lieu of a meeting which would: (1) remove all current members of the board of directors of the Company; (2) amend the bylaws of the Company to require the Company to call a special meeting of shareholders to be held forty-five (45) days after the date the bylaw amendment is adopted (the "Special Meeting") for the purpose of electing directors and to prohibit the use of corporate funds in connection with the Special Meeting except as necessary for the conduct of the Special Meeting; (3) amend the bylaws of the Company to set the authorized number of directors at seven; and (4) amend the bylaws of the Company to limit the power of the officers of the Company to take certain actions during the pendency of the Special Meeting. A copy of the Consent Statement was attached to the Schedule 13D as Exhibit 1 to the Schedule 13D and was incorporated therein by reference. Powell, while disagreeing with the Company's position regarding the request for a special meeting of shareholders to be held on September 9, 1997, intends to correct any technical deficiencies in the requests for the special meeting and to resubmit the requests in due course. Powell intends to file with the Commission a preliminary proxy statement on Schedule 14A (the "Proxy Statement"), pursuant to which Powell intends to solicit proxies from the Company's shareholders, in connection with such special meeting or the special meeting of shareholders to be called by the Company pursuant to the Consent Statement (i) to remove all of the current members of the board of directors of the Company, (ii) to amend the bylaws of the Company to set the number of directors of the Company at seven and (iii) to fill vacancies on the board created by such removal. In the event that the consent solicitation is not successful and the special 14 of 18 meeting of shareholders on September 9, 1997 is not held, Powell may solicit proxies with respect to the foregoing matters in connection with the Company's Annual Meeting of Shareholders, which the Company has indicated would be held on or about September 22, 1997. Powell believes that under cumulative voting which will be applicable to the election of the Company's directors at such special meeting of shareholders, Messrs. Gerald and Douglas Murphy will own or control sufficient shares of Common Stock to insure their election to the Board of Directors if they so desire, as Powell expects they will. William D. Blake, Robert Arthur Seale, Ms. Kelley, Eugene A. Cafiero and Mr. Spain are Powell's nominees (the "Nominees") to fill the five vacancies that would be created by the removal of the Company's current directors. Certain information about each of the Nominees (except for Ms. Kelley and Mr. Spain about whom information was provided as required in Item 2 of the Schedule 13D) was attached to the Schedule 13D as Annex B. On July 24, 1997, FRM filed a derivative complaint on behalf of the Company and ARI against Gerald D. Murphy, Douglas A. Murphy, the Company and ARI in the United States District Court, Central District of California. In the complaint, FRM alleges (1) breach of fiduciary duty, (2) waste of corporate assets and (3) illegal corporate loan. The derivative complaint further requests injunctive relief prohibiting the Company and ARI from making on-going payments on behalf of the Murphys and requiring on-going indemnification by the Murphys to the Company and ARI. A copy of the complaint was attached to the Schedule 13D as Exhibit 2 to the Schedule 13D. In the event the consent and proxy solicitations are successful, the new board of directors of the Company intends to restructure the Company's management. The new board intends to elect Ms. Kelley as President and Chief Executive Officer of the Company and John M. Spain as Managing Director of the Company. Powell generally intends to reorganize the Company and ARI to reduce their combined annual operating costs, expand their global sales, stabilize relations with major customers and enter into new markets. Powell believes that under new management it will be possible to refinance ARI's $100 million principal amount of 13% Mortgage Notes at more favorable interest rates thereby further reducing the Company's combined expenses. Powell expects to consider elimination of the Company's non-core business operations through the possible sale of such operations, although Powell at present has not identified any specific assets or operations for elimination. Powell further expects to consider combining the Company's operations with that of Powell, with FRM as a wholly-owned subsidiary, but has no present plans to do so. In the event that any such plan were proposed in the future, the combination of Powell, with FRM as a wholly-owned subsidiary, with ARI would be subject to approval of disinterested ERLY shareholders, if required, or, if required, approval of Company directors not financially interested in any such plan. Except for the election of officers described above, Powell does not currently have any specific plans to implement its objectives and will require additional information and time to analyze and understand fully the existing operations of the Company before proposing any specific plans. Upon a change in control of the Company which also results in a change in control of ARI or in the event of certain changes in the composition of the board of directors of ARI, the holders of ARI's 13% Mortgage Notes due 2002 shall have the right to require ARI to repurchase the Notes at a purchase price of 101% of the accreted value of the notes as defined. In such event, 15 of 18 Powell may seek a waiver from lenders not to exercise such rights. Powell may also seek, to the extent possible, to refinance such debt; however, the notes by their terms are not redeemable prior to July 31, 1999 and then only at a redemption price of 107% of par declining to 100% of par on July 31, 2001 and thereafter. On July 30, 1997, FRM and Ms. Kelley delivered to the Company a request to inspect the accounting books and records of the Company on August 6, 1997. A copy of the request was attached to Amendment No. 1 to the Schedule 13D as Exhibit 1. The Company denied this request. On August 13, 1997, FRM and Ms. Kelley filed a petition for writ of mandate against the Company to compel inspection of the accounting books and records of the Company in Los Angeles Superior Court. A copy of the petition is attached to this Amendment No. 2 as Exhibit 1 and is incorporated herein by reference. On August 15, 1997, FRM and Ms. Kelley delivered to the Company a request for a list of non-objecting beneficial owners of shares of common stock of the Company. FRM also requested a Cede or similar list showing the identities of holders of common stock of the Company. A copy of the request is attached to this Amendment No. 2 as Exhibit 2. Except as described above, the Filing Persons do not presently have any other proposals or plans which would result in any event listed in items (a) through (j) of Item 4 of Schedule 13D, although the Filing Persons reserve the right to develop such plans or proposals. 2. Item 5 of the Schedule 13D, "Interest in Securities of the Issues," is hereby amended to correct the number of shares beneficially owned by Noble B. Trenham. Mr. Trenham beneficially owns twelve shares of common stock of the Company, including seven shares held of record by Mr. Trenham and five shares held by First Global. Such amount represents less than one percent of the number of outstanding shares of common stock. 3. Item 7 of the Schedule 13D, "Material to be Filed as Exhibits," is hereby amended to add the following: 1. Petition filed by Farmers Rice Milling Company, Inc. and Nanette N. Kelley on August 13, 1997 in the Los Angeles Superior Court. 2. Request to ERLY Industries, Inc., dated August 15, 1997, for NOBO and Cede lists, from Farmers Rice Milling Company, Inc. and Nanette N. Kelley. 4. Except as specifically provided herein, this Amendment No. 2 does not modify any of the information previously reported on the Schedule 13D. 16 of 18 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: August 15, 1997 The Powell Group By: /s/ Nanette N. Kelley ----------------------------------- Name: Nanette N. Kelley Title: President and Chief Executive Officer Date: August 15, 1997 Farmers Rice Milling Company, Inc. By: /s/ Nanette N. Kelley ----------------------------------- Name: Nanette N. Kelley Title: President and Chief Executive Officer Date: August 15, 1997 /s/ Nanette N. Kelley ---------------------------------- Nanette N. Kelley Date: August 15, 1997 First Global Securities, Inc. By: /s/ Noble B. Trenham ------------------------------ Name: Noble B. Trenham Title: Co-Chairman Date: August 15, 1997 /s/ Noble B. Trenham ---------------------------------- Noble B. Trenham 17 of 18 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ----------- ----------- 1. Petition filed by Farmers Rice Milling Company, Inc. and Nanette N. Kelley on August 13, 1997 in the Los Angeles Superior Court. 2. Request to ERLY Industries, Inc., dated August 15, 1997, for NOBO and Cede lists, from Farmers Rice Milling Company, Inc. and Nanette N. Kelley. 18 of 18 EX-1 2 PETITION FILED ON 8/13/97 IN L.A. SUPERIOR COURT EXHIBIT 1 GIBSON, DUNN & CRUTCHER LLP DANIEL S. FLOYD, SBN 123819 KEVIN S. ROSEN, SBN 133304 DANIEL N. SHALLMAN, SBN 180782 333 SOUTH GRAND AVENUE LOS ANGELES, CALIFORNIA 90071-3197 (213) 229-7000 Attorneys for petitioners FARMERS RICE MILLING COMPANY, INC., A Louisiana Corporation SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES FARMERS RICE MILLING COMPANY, INC., a Louisiana CASE NO. Corporation, and NANETTE N. KELLEY VERIFIED PETITION FOR WRIT OF MANDATE TO COMPEL Petitioners, INSPECTION OF ACCOUNTING BOOKS AND RECORDS v. ERLY INDUSTRIES INC., a California Corporation, [CODE OF CIVIL PROCEDURE (S)(S) 1085, 1086; and DOES 1 through 100, inclusive, CORPORATIONS CODE (S) 1603] Respondents. - ------------------------------------------------
Petitioners allege as follows: PRELIMINARY STATEMENT --------------------- 1. This action is brought by Petitioners Farmers Rice Milling Company, Inc. and Nanette N. Kelley ("Petitioners"), substantial shareholders of Respondent ERLY Industries, Inc. ("ERLY" or "the Company"), to enforce Petitioners' right, as shareholders of the Company, to inspect and copy the accounting books and records of the Company. FIRST CAUSE OF ACTION --------------------- FOR ISSUANCE OF WRIT OF MANDATE TO ALLOW ACCESS TO ACCOUNTING BOOKS AND RECORDS ------------------ BY SHAREHOLDERS --------------- 2. ERLY is a corporation duly organized and existing under the laws of the State of California, having its principal executive offices and keeping its accounting books and records in the City and County of Los Angeles, State of California. 3. Gerald D. Murphy is, and at all times herein mentioned was, Chairman of ERLY. 4. Douglas A. Murphy is, and at all times herein mentioned was, President and Chief Operating Officer of ERLY. 5. The true names and capacities, whether individual, corporate, associate or otherwise of the Respondents named herein as Does 1 through 100, inclusive, are unknown to Farmers, which therefore sues such Respondents by their fictitious names. Farmers will amend this Petition to insert the true names and capacities of such Respondents, when such names and capacities become known to them. Petitioners are informed and believe and based thereon allege that each such fictitiously named Respondent is responsible on some manner, for the acts and omissions hereinafter alleged. 6. At all times herein mentioned, Petitioners are informed and believe that each of the respondents was the agent and employee of each of the remaining respondents, and, in doing the things hereinafter alleged, was acting within the course and scope of such agency. 7. Petitioner Farmers Rice Milling Company, Inc. is the owner of record of 171,933 shares of common stock of ERLY. Petitioner Nanette N. Kelley is the owner of record of 16,400 share of common stock of the Company. On July 30, 1997, Petitioners made written demand on respondents to make available to petitioner for inspection and the making of copies and extracts therefrom ERLY's accounting books and records. A true and correct unsigned copy of Petitioners' inspection demand is attached hereto as Exhibit A and made a part hereof. The Company has failed and refused and continues to fail and refuse to provide Petitioners with access to the accounting books and records requested by Petitioners. A true and correct copy of ERLY's response is attached hereto as Exhibit B. 8. Petitioners' purpose in demanding inspection is reasonably related to its interest as a 2 shareholder in ERLY for the following reasons: (a) To adequately assess the value of their current holdings in ERLY to determine whether to increase their investment in the Company; (b) To evaluate the fairness, significance, and extent of transactions involving ERLY and its subsidiaries in which Gerald D. Murphy and Douglas A. Murphy have a personal financial interest 9. Petitioners have no plain, speedy, and adequate remedy in the ordinary course of law, other than the relief sought in this Petition, in that Petitioners have no means by which to otherwise discover the condition of ERLY, the value of its shares in the corporation and to evaluate the transactions involving ERLY and its subsidiaries in which Gerald D. Murphy and Douglas A. Murphy have a financial interest. 10. Pursuant to California Corporations Code Section 1601, "[t]he ---------- ------------ ---- accounting books and records . . . of any domestic corporation . . . shall be open to inspection upon the written demand on the corporation of any shareholder or holder of a voting trust certificate at any reasonable time during usual business hours, for a purpose reasonably related to such holder's interests as a shareholder . . . ." Similar rights are recognized under the common law of the state of California. 11. Petitioners are entitled to the inspection rights afforded it under Corporations Code Section 1601, and under the common law, but have been denied them by Respondents. WHEREFORE, Petitioners prays for judgment as follows: 1. That the Court issue an alternative writ of mandate commanding Respondents and each of them to make available to Petitioners and/or their agents and attorneys, for inspection, copying, and making of extracts therefrom, all of the books and records of the Company, or to show cause before this Court, at a time specified by the Court, why they have not done so, and why a peremptory writ should not issue. 2. That on the return of the alternative writ and the hearing of this Petition, the Court issue a peremptory writ of mandate commanding Respondents and each of them to make available to Petitioners and/or their agents and attorneys, for inspection, copying, and making of extracts therefrom, all of the books and records of the Company; 3. For an award of costs herein incurred; 3 4. For an award to Petitioners of reasonable accountant, expert and attorney's fees incurred in this action; 5. For such further and other relief as this Court shall deem just and proper. DATED: August 11, 1997 GIBSON, DUNN & CRUTCHER LLP DANIEL S. FLOYD KEVIN S. ROSEN DANIEL N. SHALLMAN BY: /s/ Daniel S. Floyd -------------------------------------- DANIEL S. FLOYD Attorneys for Petitioner FARMERS RICE MILLING COMPANY, INC., a Louisiana Corporation 4 VERIFICATION ------------ I, Daniel S. Floyd, have read the foregoing PETITION FOR WRIT OF MANDATE TO COMPEL ACCESS TO ACCOUNTING BOOKS AND RECORDS, and know its contents. I am the President of Petitioner Farmers Rice Milling Company, Inc, a party to this action, and am authorized to make this verification for and on its behalf, and I make this verification for that reason. I am also a party to this action, and further make this verification on my own behalf. The matters stated in the foregoing document are true of my own knowledge except as to those matters which are stated on information and belief, and as to those matters I believe them to be true. I declare under penalty of perjury that the foregoing is true and correct and that this declaration was executed on August 11, 1997, at Baton Rouge, Louisiana. /s/ Nanette N. Kelley --------------------- Nanette N. Kelley EX-2 3 REQUEST FOR NOBO AND CEDE LISTS DATED 8/15/97 [THE POWELL GROUP LETTERHEAD] EXHIBIT 2 August 15, 1997 Mr. Gerald D. Murphy Chairman of the Board ERLY Industries, Inc. 10990 Wilshire Boulevard, #1800 Los Angeles, California 90024 Re: ERLY Industries Inc. - Request for NOBO and Cede Lists Dear Mr. Murphy: The undersigned, record shareholders holding at least one percent (1%) in the aggregate of the outstanding voting shares of ERLY Industries Inc. (the "Company"), who have filed, on July 25, 1997 (as amended on August 14, 1997), a Schedule 14A with the Securities and Exchange Commission, hereby request that the Company, in connection with the satisfaction of its duties under Section 1600 of the California General Corporation Law, make available to the undersigned, within 5 days, a copy of a list of Non-Objecting Beneficial Owners ("NOBO List") of shares of Common Stock of the Company. The undersigned understand that the Company has recently come into possession of a NOBO List as of a recent date. Additionally, the undersigned request from the Company a copy of a Cede list, any listing from The Depository Trust Company or any similar depository listing showing the identities of holders of Common Stock of the Company, whether presently in the possession of the Company or which comes into possession of the Company in connection with the forthcoming Annual Meeting of Shareholders, scheduled to be held on September 26, 1997. If such a list is presently in the possession of the Company, the undersigned request that the Company make available a copy of such list within 5 days. If such a list comes into possession of the Company on a date after the date hereof, the undersigned request that the Company make available a copy of such list within 5 days of the Company's receipt of such list. Mr. Gerald D. Murphy Page 2 August 15, 1997 Please call Nanette Kelley at 504-922-4664 when the copies of the lists may be picked up. If you have any questions concerning the foregoing, please contact Bradford P. Weirick at 213-229-7765 on Peter F. Ziegler at (213) 229- 7595. Very truly yours, FARMERS RICE MILLING COMPANY By: /s/ Nanette N. Kelley ----------------------- Nanette N. Kelley President NANETTE KELLEY /s/ Nanette N. Kelley ----------------------------------------- Nanette N. Kelley -----END PRIVACY-ENHANCED MESSAGE-----