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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(e) OF THE SECURITIES EXCHANGE ACT OF 1934)
Raytech Corporation
(Name of the Issuer)
Raytech Corporation Asbestos Personal Injury Settlement Trust
(Name of Person(s) Filing Statement)
$1.00 Par Value Common Stock
(Title of Class of Securities)
755103108
(CUSIP Number of Class of Securities)
Copy to:
Richard A. Lippe, Trustee
Raytech Corporation Asbestos Personal Injury Settlement Trust
c/o Meltzer, Lippe, Goldstein & Breitstone, LLP
190 Willis Avenue
Mineola, NY 11501
(516) 747-0300
(Name, Address and Telephone Number of Person Authorized
to Receive
Notices and Communications on Behalf of Person(s) Filing
Statement)
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This statement is filed in connection with (check the appropriate box):
|_| (a) The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C, or Rule 13e-3(c) under
the Securities Exchange Act of 1934.
|_| (b) The filing of a registration statement under the Securities Act of
1933.
|_| (c) A tender offer.
|X| (d) None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies. |_|
Check the following box if the filing is a final amendment reporting the results
of the transaction. |_|
Calculation of Filing Fee
------------------------------------------------------------------------
Transaction Valuation* Amount of Filing Fee
$9,441,794 $1,112.00
*For purposes of calculating the Filing Fee only. Assumes the payment of an
aggregate of $9,441,794, comprised of $4,262,132 to be paid for 3,228,888 shares
of common stock of the Issuer, under a previously negotiated Settlement
Agreement with creditors of the Issuer and former affiliates of the Issuer, and
$5,179,662 to be paid for 3,923,986 shares of common stock of the Issuer
acquired in a short-form merger transaction with the Issuer's unaffiliated
public stockholders. The amount of the filing fee, calculated in accordance with
Regulation 240.0-11(b) of the Securities Exchange Act of 1934 and Fee Rate
Advisory #6 for Fiscal Year 2005 issued by the United States Securities and
Exchange Commission (2004-167), equals $117.70 for each one million ($1,000,000)
dollars (based upon the value of the securities to be acquired in the
transactions described in this transaction statement).
|_| Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid:
Form or Registration No.:
Filing Party:
Date
Filed:
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2
SUMMARY TERM SHEET
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the transaction, passed upon the
merits or fairness of the transaction, or passed upon the adequacy or accuracy
of the disclosure in this document. Any representation to the contrary is a
criminal offense.
This Summary Term Sheet briefly describes the "going-private" transaction
involving Raytech Corporation ("Raytech" or the "Company"), how it affects you,
what your rights are with respect to the transaction as a stockholder of
Raytech, and the position of Raytech Corporation Asbestos Personal Injury
Settlement Trust (the "Trust") about the fairness of the transaction to
Raytech's unaffiliated public stockholders. (Raytech's unaffiliated public
stockholders are you and the other stockholders, except for the Trust, its
affiliates, and the "Sellers" described in "About the Acquisition", below.)
Please read this Summary Term Sheet and the remainder of this transaction
statement on Schedule 13E-3 very carefully.
Principal Terms of the Transaction
About Raytech Raytech develops, manufactures and supplies
specialty engineered friction and energy
absorption components used in oil immersed (wet)
and dry transmission and brake systems for on-
and off-road vehicles. Raytech also makes and
markets specialty engineered products for heat
resistant, inertia control, and energy
absorption applications. Raytech's products are
typically found in passenger cars, heavy-duty
construction and agricultural equipment, trucks,
buses and logging, mining and military vehicles.
Raytech was incorporated in Delaware in June
1986 as a subsidiary of Raymark Corporation
("Raymark"). In October 1986, each share of
common stock of Raymark was automatically
converted into a share of Raytech. As a result
of this conversion, Raytech became Raymark's
sole shareholder, and Raytech's stock began
trading on the New York Stock Exchange. In May
1988, Raytech sold all of its Raymark stock.
Under a restructuring plan, Raytech (through its
subsidiaries) purchased non-asbestos related
businesses of Raymark.
About the Asbestos Lawsuits Prior to 1986, Raymark and Raymark Industries,
Inc. had been named as defendants in lawsuits
claiming substantial damages for injury or death
from exposure to airborne asbestos fibers. In
spite of the restructuring plan, Raytech was
named a co-defendant with Raymark and other
defendants in numerous asbestos-related lawsuits
as a successor in liability to Raymark.
3
In a lawsuit decided in 1988, the United States
District Court in Oregon ruled that Raytech was
to be a successor to Raymark's asbestos related
liability (Oregon equity law). After several
court rulings, including an appeal to the United
States Supreme Court, the Oregon case remained
as the prevailing decision holding Raytech to be
a successor to Raymark's asbestos related
liabilities. In order to stay the asbestos
related litigation, on March 10, 1989, Raytech
filed a petition seeking relief under Chapter
11, Title 11, United States Code in the United
States Bankruptcy Court, District of Connecticut
("Bankruptcy Court").
About the Reorganization In October 1998, Raytech reached a tentative
settlement with its creditors for a consensual
plan of reorganization providing for all general
unsecured creditors to receive approximately 90%
of the equity in Raytech in exchange for their
claims. The Trust was created under the
settlement plan to use its assets and income to
satisfy all asbestos-related claims. As
reorganized, Raytech issued approximately 83% of
its common stock to the Trust, 7% to government
and other claimants, and 10% to Raytech's public
stockholders at the time.
As of the date of this transaction statement,
the Trust owns 34,584,432 shares of Raytech's
common stock (or 82.86% of its outstanding
shares).
About the Trust The Trust is governed by the laws of the State
of New York. The Trust was formed as an
irrevocable trust pursuant to the Raytech
Corporation Asbestos Personal Injury Settlement
Trust Agreement, effective as of April 18, 2001,
to assume all liabilities of Raytech, and its
predecessors and successors in interest, in
actions involving personal injury or death
claims caused by exposure to asbestos containing
products for which Raymark or its predecessors
and affiliates have legal liability.
Two of the three Trustees of the Trust are also
directors of Raytech. See Item 3, "Identity and
Background of Filing Person" and Schedule I to
this Schedule 13E-3.
About the
Acquisition In connection with the plan of Raytech
Corporation, Case No. 89-00293, confirmed by the
United States Bankruptcy Court for the District
of Connecticut on August 13, 2000, the Trust
entered into an Agreement, dated June 8, 2000,
and Settlement Agreement, dated October 31,
2001, each with the United States Environmental
Protection Agency, the Connecticut Department of
Environmental Protection, and FMC Corporation
("Environmental Creditors").
4
The purpose of the agreements was to mutually
resolve claims of the Environmental Creditors
against Raytech, Raymark Industries, Inc. and
Raymark Corporation. The agreements provide for
the assignment by the Environmental Creditors to
the Trust of their interest in certain assets of
Raytech and of the estates of Raymark and
Universal Friction Composites, the division of
the proceeds of Raymark liability insurance and
the future transfer by the Environmental
Creditors of the Raytech common stock owned by
them.
In consideration for the compromise and
settlement of the Environmental Creditors'
claims, the Trust and the Environmental
Creditors determined that is was in each party's
interest to accelerate the settlement of the
2000 and 2001 agreements. On July 7, 2005, the
Trust entered into a Supplemental Settlement
Agreement, dated May 25, 2005, to accelerate the
consummation of the earlier agreements (the
"2005 Agreement"). Under the 2005 Agreement, the
Trust will acquire 3,228,888 shares of Raytech
common stock and other assets and consideration
from the Environmental Creditors in exchange for
the payment of $9,457,776 (the "Acquisition").
See Item 4, "Terms of the Transaction", in this
transaction statement.
Upon completion of the Acquisition, the Trust's
ownership of the shares of Raytech's common
stock will increase from approximately 82.86% to
approximately 90.6%. The 2005 Agreement contains
closing conditions including the approval of the
Acquisition by the Bankruptcy Court. See the
section entitled "Fairness of the Going-Private
Transaction", in this transaction statement.
This transaction statement is being filed
because the acquisition of the shares of Raytech
by the Trust is the first step in a transaction
which will result in a "Rule 13E-3 transaction"
(as defined under the Exchange Act).
The Short-Form Merger Upon completion of the Acquisition, the Trust
will own approximately 90.6% of Raytech's
outstanding common stock. After completion of
the Acquisition, we intend to undertake a
short-form merger. We intend the short-form
merger to result in the acquisition of all of
the outstanding shares of Raytech's common stock
owned by unaffiliated public stockholders of
Raytech.
5
To effect the short-form merger, we will
organize a wholly-owned subsidiary corporation
("merger subsidiary") and transfer all of the
shares of Raytech common stock owned by the
Trust to the merger subsidiary, causing the
merger subsidiary to own approximately 90.6% of
Raytech's outstanding shares. Our merger
subsidiary will then merge into Raytech. Upon
the effectiveness of the merger, each
outstanding share of Raytech's common stock
owned by the unaffiliated public stockholders
will be canceled. In exchange, our merger
subsidiary will pay the unaffiliated public
stockholders the sum of $1.32, in cash, for each
share of Raytech common stock. Raytech will
survive the merger. See "Special Factors -
Purposes, Alternatives, Reasons and Effects of
the Going-Private Transaction " and Item
4(a)(2), "Terms of the Transaction - Material
Terms - Mergers or similar transactions" in this
transaction statement.
After the short-form merger, we intend to cause
the registration of Raytech's common stock under
the Exchange Act and its listing on the New York
Stock Exchange to be terminated.
When we refer to the "going-private transaction"
in this transaction statement, we mean both the
acquisition of shares under the 2005 Agreement
and the short-form merger.
Purpose of the Going-Private
Transaction The Trust's purpose in engaging in the
going-private transaction is to own all of
Raytech's stock. Upon completion of the
short-form merger, Raytech will be wholly-owned
by the Trust. The transactions have been
structured in order to effect a prompt and
orderly transfer of the minority ownership of
Raytech from the unaffiliated public
stockholders to us, and to provide the
unaffiliated public stockholders with cash
payments for all of their Raytech common stock
as promptly as practicable. See "Special Factors
- Purposes, Alternatives, Reasons and Effects of
the Going-Private Transaction - Purposes."
Merger Consideration The consideration to be paid to Raytech's
unaffiliated public stockholders in the
short-form merger for their stock will be $1.32,
in cash, per share. This price is equal to the
closing price per share of Raytech's common
stock on July 6, 2005, the day before the 2005
Agreement was executed and the day before the
first public announcement of the execution of
the 2005 Agreement.
6
Tax Consequences Generally, the cash consideration received by
the unaffiliated public stockholders in the
short-form merger will be taxable for United
States federal income tax purposes. You will
recognize taxable gain or loss in the amount of
the difference between $1.32 and your adjusted
tax basis for each share of Raytech common stock
that you own at the time of the short-form
merger. See "Special Factors - Certain Federal
Income Tax Consequences of the Going-Private
Transaction" in this transaction statement.
No Stockholder Vote Because we will own more than 90% of Raytech's
outstanding shares after the acquisition of the
shares pursuant to the 2005 Agreement, the
Delaware General Corporation Law ("DGCL") will
permit the short-form merger without the
requirement of a vote by Raytech's stockholders.
See "Special Factors - Fairness of the
Going-Private Transaction" and Item 4, "Terms of
the Transaction" in this transaction statement.
Surrender of Certificates and
Payment for Shares We will pay you for your shares of Raytech
common stock promptly after the effective date
of the short-form merger. Instructions for
surrendering your stock certificates will be set
forth in a Notice of Merger and Appraisal Rights
and a Letter of Transmittal, which will be
mailed to our unaffiliated public stockholders
of record within 10 calendar days after the
short-form merger becomes effective. Please do
not send your stock certificates to us until you
have received and read the Notice of Merger and
Appraisal Rights and the Letter of Transmittal.
You will waive your appraisal rights if you send
us your stock certificates with a properly
signed Letter of Transmittal. See Item 4, "Terms
of the Transaction" in this transaction
statement.
Source and Amount of Funds We estimate the total cost of the going-private
transaction to be approximately $15 million.
This estimate includes payments under the 2005
Agreement of $9,457,776 and the short-form
merger (estimated at $5,179,662) and related
fees and expenses. We intend to pay these costs
with cash on hand. The going-private transaction
is not subject to any financing condition. See
Item 10, "Source and Amount of Funds or Other
Consideration" in this transaction statement.
7
Fairness of the Going-Private Transaction
The Trust's Position on
the Fairness of the
Going-Private Transaction We have determined that the going-private
transaction is both substantively and
procedurally fair to Raytech's unaffiliated
public stockholders. This belief is based on the
following factors:
o The going-private transaction represents (in our
opinion) an opportunity for Raytech's
unaffiliated public stockholders to receive cash
for each share of Raytech common stock, not
subject to any financing condition, at the July
6, 2005 closing sale price of $1.32 per share.
o This going-private transaction offers liquidity
to the unaffiliated public stockholders. The
common stock of Raytech, currently listed on the
New York Stock Exchange ("NYSE"), is thinly
traded, with average daily trading volume during
the two months prior to the announcement of the
going-private transaction of less than 15,000
shares. On August 1, 2005, Raytech was notified
by the NYSE that it is not in compliance with
the NYSE's increased continued listing
standards. Under the rules and procedures of the
NYSE, Raytech must respond to the NYSE within 45
days with a business plan that demonstrates
compliance with the continued listing standards.
Raytech has stated that it does not believe that
it can take the steps that will permit it to
satisfy the criteria of the NYSE. In the event
Raytech's common stock is delisted, the stock
will become even more illiquid. The merger
represents an opportunity for Raytech's public
stockholders (especially those stockholders with
large holdings of shares) to realize cash for
their shares, at a price which might otherwise
be difficult to realize, given such illiquidity.
o The unaffiliated public stockholders of Raytech
have the right (under Delaware law) to be paid
"fair value" for their Raytech shares. See
"Special Factors - Fairness of the Going-Private
Transaction."
Appraisal Rights You have the right, under the DGCL, to ask the
Delaware courts to value your shares. The
court's valuation may be higher or lower than
the price we are offering to pay. In order to
qualify for these rights, you must make a
written demand for appraisal within 20 days
after the date of mailing of the Notice of
Merger and Appraisal Rights and comply with the
additional requirements set forth in
8
Section 262 of the DGCL. You must be very
careful when you exercise your appraisal rights,
because if you do not comply strictly with the
law's procedures, you will lose your appraisal
rights. You are encouraged to seek advice from
legal counsel, if you desire to dissent from
this going-private transaction. See Item 4(c),
"Terms of the Transaction - Appraisal rights,"
in this transaction statement.
About the Going-Private Transaction
Effects of the Going-Private
Transaction The going-private transaction will have the
following consequences:
o Each of your shares of Raytech common stock
will be converted into the right to receive
$1.32 in cash, without interest (unless you
exercise your statutory appraisal rights, in
which case the Delaware courts will value your
shares. The court's valuation may be higher or
lower than the price we are offering to pay).
o We will own 100% of the business of Raytech.
o Only we will benefit from any future earnings
and growth of Raytech's business operations.
Conversely, we will suffer from any future
losses generated by Raytech's operations or
decline in Raytech's value.
o Raytech will no longer be required to file
reports with the United States Securities and
Exchange Commission.
o Raytech will no longer be listed on the New
York Stock Exchange.
o Raytech will no longer have to pay the costs
associated with being a public company
(including legal, accounting, insurance and
other fees).
See "Special Factors - Purposes, Alternatives,
Reasons and Effects of the Going-Private
Transaction - Effects."
For More Information You may read and copy any of the documents
incorporated by reference at the public
reference room of the Securities and Exchange
Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the
Securities and Exchange Commission at
1-800-SEC-0330 for further information on the
public reference rooms. These SEC
9
filings are also available to the public from
commercial document retrieval services and at
the SEC's Internet web site at www.sec.gov.
Documents filed by Raytech and incorporated by
reference are available without charge upon
request to: Raytech Corporation, Four Corporate
Drive, Suite 295, Shelton, CT 06484. All
documents filed by Raytech pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act
from the date of this transaction statement to
the effective time of the short-form merger
shall also be deemed to be incorporated into
this transaction statement by this reference.
See Item 2, "Subject Company Information," and
Item 3, "Identity and Background of Filing
Person" in this transaction statement.
If you have any questions about this
going-private transaction, please call Ira R.
Halperin, the Trust's special legal counsel, at
(516) 747-0300.
10
SPECIAL FACTORS
PURPOSES, ALTERNATIVES, REASONS AND EFFECTS
OF THE GOING-PRIVATE TRANSACTION
Purposes
The purpose of the going-private transaction is for the Trust, the
majority stockholder of Raytech, to acquire all of the outstanding shares of
Raytech's stock and to terminate Raytech's registration under the Exchange Act.
Upon completion of the Acquisition, less than 10% of the outstanding shares of
Raytech's common stock will be held by unaffiliated public stockholders. We
believe that the going-private transaction is desirable because it will relieve
Raytech of the substantial obligations and expenses of a public company. We
believe that Raytech's direct and indirect expenses of complying with the
Exchange Act have a negative effect on it's business operations and its
financial performance. In addition, we expect these expenses will increase, due
to recent legislative and regulatory initiatives to improve corporate governance
(such as the Sarbanes-Oxley Act of 2002).
We estimate that Raytech spent approximately $1,430,000 for the year ended
December 31, 2004, in costs related to being a public company. These costs can
be attributed to directors' and officers' insurance (approximately $550,000 on
an annual basis); personnel costs and fees related to filings with the SEC and
NYSE and shareholder communications (approximately $300,000 on an annual basis);
fees and costs related to complying with the Sarbanes-Oxley Act of 2002
(approximately $350,000 on an annual basis), and a portion of the fees paid for
audit services and audit related services (approximately $230,000 on an annual
basis). We estimate that Raytech's costs during the year ended December 31, 2004
would have been reduced by approximately $1,430,000 if Raytech had been a
private company at the time.
We believe that savings for Raytech will result from the elimination of
NYSE stock market fees, press release expenses, and certain legal fees, as well
as a significant reduction in supplemental audit and consulting fees necessary
for public companies, independent directors' compensation, officers and
directors liability insurance, tax compliance, printing and mailing costs,
filing fees, stock transfer agent expenses, and other direct expenses associated
with the required SEC filings. (Currently, Raytech pays for all of these costs
every year.)
To our knowledge, Raytech has no present intention or current or
foreseeable ability to raise capital by selling securities in a public offering,
or to acquire other business entities using its stock as the consideration for
any such acquisition. For these reasons, Raytech is unlikely to be in a position
to benefit from its status as a public company. Based on Raytech's size and
resources, we do not believe the costs associated with Raytech remaining a
public company are justifiable. We believe that the costs of remaining a public
company are too high in relation to the benefits of being a public company, and
that it would be irresponsible for Raytech to continue as a public company. In
light of the high costs, we believe that it is desirable for Raytech to
eliminate the administrative and financial burden of remaining a public company.
11
Alternatives
We believe that the going-private transaction is the quickest and most
cost-effective way for us to acquire Raytech's outstanding public minority
equity interest. Because of the 2000 and 2001 settlement agreements and the
determination to enter into the 2005 Agreement with the Environmental Creditors,
we are able to acquire a sufficient percentage of Raytech's outstanding stock to
allow us to use a short form merger to acquire Raytech's remaining outstanding
public minority interest. Therefore, we decided against a long-form merger
because of the cost and delay of obtaining the approvals of the unaffiliated
public stockholders. We also rejected the alternative of a tender offer for
Raytech's common stock. A tender offer would entail additional costs, and a
subsequent short-form merger could still be required.
Reasons
We considered several factors in determining whether to effect the
going-private transaction, including these:
o the decrease in costs, particularly those associated with being a public
company (for example, as a privately-held entity, Raytech would no longer
be required to file quarterly, annual or other periodic reports with the
SEC or publish and distribute to its stockholders annual reports and proxy
statements), that the Trust's board of trustees anticipates could result
in significant savings, including supplemental audit and consulting fees
necessary for public companies and legal fees;
o the elimination of additional burdens on Raytech's management caused by
being a public company (including, for example, the dedication of time and
resources of Raytech's management and board of directors to stockholder,
investor, and public relations matters);
o that given Raytech's relatively small shareholder base, the costs of
maintaining Raytech's status as a public company are not justified and
that Raytech and its majority shareholder currently derive no material
benefit from registration under the Exchange Act;
o the greater flexibility that Raytech's management would have to focus on
long-term business goals, rather than issues of being a public company;
o the payment of $1.32 per share might otherwise be difficult for the
unaffiliated public stockholders to realize (especially those stockholders
with large holdings of shares), in light of the illiquidity of the market
for shares of Raytech common stock;
o recent public capital market trends affecting micro-cap companies (like
Raytech), including a reduction in interest by institutional investors;
and
o the recent disclosure by Raytech of the impending delisting of its stock
by the NYSE will make the market for the stock even more illiquid than it
currently is.
Our Trustees also considered the advantages and disadvantages of
continuing Raytech's current status as a majority-owned, public subsidiary. In
our view, the principal advantage would be our ability to make other uses of the
12
cash that would otherwise be required to pay the purchase price for the
acquisition of the shares and the short-form merger. The disadvantages of
continuing Raytech as a majority-owned, public subsidiary include the inability
to achieve many of the benefits discussed above. We concluded that the
advantages of continuing Raytech's current status were significantly outweighed
by the disadvantages of doing so.
We seek to accomplish the going-private transaction at this time (i.e., as
promptly as practicable after acquiring beneficial ownership of greater than 90%
of the shares of Raytech common stock) because we wish to take advantage of the
benefits of Raytech becoming a privately-owned company.
Effects
General. After the going-private transaction, we will have complete
control over the conduct of Raytech's businesses and assets. Its management will
be under our exclusive control. In addition, we will benefit from any future
increases in the value of Raytech's business, and, conversely, we will bear the
complete risk of any losses incurred in the operation of Raytech's business and
any decrease in the value of Raytech's business. Once the short-form merger is
completed, the unaffiliated public stockholders will no longer be able to
benefit from a sale of Raytech to a third party.
We expect to own approximately 90.6% of Raytech's outstanding stock,
immediately following the Acquisition and prior to the short-form merger.
The Unaffiliated Public Stockholders. Upon completion of the short-form
merger, the unaffiliated public stockholders will no longer have any interest in
Raytech, and will not be stockholders any longer. They will not participate in
Raytech's future earnings and growth. They will no longer bear the risk of any
decreases in Raytech's value. In addition, the unaffiliated public stockholders
will not share in any distribution of proceeds after a sale of any of the
businesses of Raytech. See Item 6, "Purposes of the Transaction and Plans or
Proposals - Plans." All of the other benefits of stock ownership by the
unaffiliated public stockholders (such as the right to vote on certain corporate
decisions, to elect directors, and to receive distributions upon the sale of
Raytech), as well as the benefit of potential increases in the value of
Raytech's stock price, will be extinguished upon completion of the short-form
merger.
Following the short-form merger, the unaffiliated public stockholders will
have liquidity as a result of receiving the merger consideration in exchange for
their shares of Raytech's stock.
In summary, if the short-form merger is completed, the unaffiliated public
stockholders will give up all of their rights as stockholders of Raytech.
Raytech's Common Stock. If the short-form merger is completed, public
trading of the shares of Raytech's common stock will cease. We intend to
deregister the Raytech common stock under the Exchange Act. As a result, Raytech
will no longer be required, under the federal securities laws, to file reports
with the SEC, and will no longer be subject to the proxy rules under the
Exchange Act. In addition, the principal stockholders of Raytech will no longer
be subject to reporting their ownership of shares of Raytech common stock under
Sections 13 and 16 of the Exchange Act, or the obligations under Section 16 of
the Exchange Act to disgorge to Raytech certain "short-swing" profits from the
purchase and sale of shares of Raytech's common stock.
13
In addition, on August 1, 2005, Raytech was notified by the NYSE that it is not
in compliance with the NYSE's increased continued listing standards. Raytech is
considered "below criteria" due to the fact that its total market capitalization
is less than $75 million over a 30-day trading period and its stockholders'
equity is less than $75 million. As of August 8, 2005, the NYSE made available
on its consolidated tape, an indicator, "BC," indicating Raytech is below the
NYSE's quantitative continued listing standards. Under the rules and procedures
of the NYSE, Raytech must respond to the NYSE within 45 days with a business
plan that demonstrates compliance with the continued listing standards. Raytech
has stated that it does not believe that it can take steps which will permit it
to satisfy the financial criteria of the NYSE.
Treatment of options. Pursuant to the terms of the short-form merger, all
vested options that are exercised to purchase Raytech's stock will be converted
into the right to receive the short-form merger consideration of $1.32 per
share. Upon exercise of options with an exercise price less than $1.32 per
share, each holder will receive the difference between the exercise price of its
options and $1.32 per option share.
Directors. Our Trustees are the persons listed in Schedule I to this
transaction statement.
SELECTED FINANCIAL DATA
The selected consolidated financial information presented below, under the
captions "Income Statement Data" for the years ended January 2, 2005 and
December 28, 2003 and December 29, 2002 and "Balance Sheet Data" at January 2,
2005 and December 28, 2003, have been prepared in accordance with United States
generally accepted accounting principles ("GAAP"). This information has been
derived from Raytech's audited consolidated financial statements included in its
annual report on Form 10-K for the fiscal year ended January 2, 2005, which
financial statements are incorporated by reference in this Transaction
Statement.
The selected consolidated financial information presented below, under the
captions "Income Statement Data" for the thirteen weeks ended April 3, 2005 and
March 28, 2004 and "Balance Sheet Data" at April 3, 2005, have been prepared in
accordance with GAAP and have been derived from Raytech's consolidated financial
statements included in Raytech's Quarterly Report on Form 10-Q for the fiscal
quarter ended April 3, 2005, which financial statements are incorporated herein
by reference. Please note that the interim results are not necessarily
indicative of results that may be expected for any other period of the year.
14
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Income Statement Data Years Ended Thirteen Weeks Ended
December 29, December 28, January 2, March 28, April 3,
2002 2003 2005 2004 2005
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Audited Audited Audited Unaudited Unaudited
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(Dollars in thousands, except per share data)
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Net Sales $ 209,866 $ 205,865 $ 227,313 $56,598 $63,352
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Gross Profit 36,771 26,126 40,935 11,059 11,996
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Operating (loss) profit 4,440 (57,473) (3,051) 2,449 1,991
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Net Income (loss) (2,825) (66,443) (2,750) 1,351 1,620
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Basic and diluted income (loss) per share (.07) (1.59) (.07) .03 .04
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Weighted average number of shares used in
computing net earnings (loss) per share
(in thousands): 41,608 41,728 41,737 41,737 41,737
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----------------------------------------------------------------------------------------------------------------------
Balance Sheet Data December 28, January 2, April 3,
2003 2005 2005
----------------------------------------------------------------------------------------------------------------------
Audited Audited Unaudited
----------------------------------------------------------------------------------------------------------------------
(Dollars in thousands, except per share data)
----------------------------------------------------------------------------------------------------------------------
Current assets $ 83,756 $ 94,452 $ 98,602
----------------------------------------------------------------------------------------------------------------------
Non-current assets 122,268 111,234 107,784
----------------------------------------------------------------------------------------------------------------------
Total assets 206,024 205,686 206,386
----------------------------------------------------------------------------------------------------------------------
Current liabilities 58,342 60,799 64,847
----------------------------------------------------------------------------------------------------------------------
Long-term Liabilities 62,384 61,687 66,310
----------------------------------------------------------------------------------------------------------------------
Total liabilities 120,726 122,486 131,157
----------------------------------------------------------------------------------------------------------------------
Shareholders' equity 75,910 73,180 73,960
----------------------------------------------------------------------------------------------------------------------
Book Value Per share 1.82 1.75 1.77
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Ratio of Earnings to Fixed Charges
Raytech's consolidated ratio of earnings to fixed charges is as follows:
For the Year Ended For the Thirteen Weeks
December 28, January 2, Ended April 3,
2003 2005 2005
------------------------------------------------------------
Ratio of Earnings to Fixed Charges -34.74* 0.82 8.65x
For the purposes of this ratio, "earnings" consists of earnings before income
taxes, minority interest and fixed charges, and "fixed charges" consists of
interest on indebtedness and capital lease obligations, and the interest
component of rental expenses.
*Reflects a deficiency of approximately $39,069,000
15
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE GOING-PRIVATE TRANSACTION
The following is a general summary of the material United States federal
income tax consequences of the going-private transaction to beneficial owners of
shares of Raytech Common Stock. This summary is based upon the provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), applicable treasury
regulations, judicial decisions, and current administrative rulings in effect on
the date of this Schedule 13E-3. This discussion does not address all aspects of
United States federal income taxation that may be relevant to particular
taxpayers in light of their personal circumstances, or to taxpayers subject to
special treatment under the Code (for example, financial institutions, real
estate investment trusts, regulated investment companies, brokers, dealers or
traders in securities or foreign currencies, life insurance companies, foreign
corporations, foreign partnerships, foreign estates or trusts, individuals who
are not citizens or residents of the United States, and beneficial owners whose
shares of Raytech common stock were acquired pursuant to the exercise of
warrants, employee stock options, or otherwise as compensation). This discussion
also does not address any aspect of state, local, foreign, or other taxation.
The receipt of cash by a stockholder, pursuant to the short-form merger or
pursuant to the exercise of the stockholder's statutory appraisal rights, will
be a taxable transaction for United States federal income tax purposes and may
also be taxable for state and local income tax purposes as well. Accordingly, a
stockholder whose shares of Raytech common stock are converted, pursuant to the
short-form merger, into a right to receive cash will recognize gain or loss
equal to the difference between (a) the amount of cash that the stockholder
receives in the short-form merger and (b) the stockholder's adjusted tax basis
in his shares. The gain or loss will be treated as a capital gain or loss.
Generally, the gain or loss will be long-term capital gain or loss if (at the
effective date of the short-form merger) the stockholder's holding period for
his Raytech shares is more than one year. Holders of shares of Raytech common
stock should be aware that [___________], the paying agent, will be required in
certain cases to withhold and remit to the United States Treasury 31% of amounts
payable in the short-form merger to any stockholder that (1) has provided either
an incorrect tax identification number or no number at all, (2) is subject to
backup withholding by the Internal Revenue Service for failure to report the
receipt of interest or dividend income properly, or (3) has failed to certify to
the paying agent that such stockholder is not subject to backup withholding or
that such stockholder is an "Exempt Recipient." Backup withholding is not an
additional tax, but rather may be credited against the taxpayer's tax liability
for the year. In general, cash received by unaffiliated public stockholders who
exercise statutory appraisal rights in respect of appraisal rights will result
in the recognition of gain or loss to the dissenting stockholder. Any dissenting
stockholder should consult with his tax advisor for a full understanding of the
tax consequences of receiving cash in respect of appraisal rights pursuant to
the short-form merger.
Neither the merger subsidiary nor Raytech expects to recognize any gain,
loss, or income due to the short-form merger.
EACH BENEFICIAL OWNER OF SHARES OF RAYTECH COMMON STOCK IS URGED TO
CONSULT HIS TAX ADVISOR ABOUT THE SPECIFIC TAX
16
CONSEQUENCES TO HIM OF THE SHORT-FORM MERGER, INCLUDING THE APPLICATION OF
STATE, LOCAL, FOREIGN, AND OTHER TAX LAWS.
FAIRNESS OF THE GOING-PRIVATE TRANSACTION
Fairness. We currently own approximately 82.86% of the outstanding shares
of Raytech common stock. We expect to own approximately 90.6% of Raytech's stock
after completing the acquisition of shares under the 2005 Agreement. As a
result, we are considered an "affiliate" of Raytech under Rule 12b-2 of the
Exchange Act. The rules of the SEC require us to express our belief about the
substantive and procedural fairness of the going-private transaction to the
unaffiliated public stockholders of Raytech. In compliance with Rule 13e-3 under
the Exchange Act, our Trustees have considered the fairness of the going-private
transaction to the unaffiliated public stockholders, and unanimously concluded
that the going-private transaction is fair to them.
Our Trustees determined to consummate a proposed two-step plan to acquire
the outstanding minority stockholder interest in Raytech through the
going-private transaction. The initial step of the going-private transaction is
the completion of the Acquisition under the 2005 Agreement. After the
Acquisition, our merger subsidiary will acquire, for a per share price of $1.32
in cash, all of the shares of Raytech common stock held by the unaffiliated
public stockholders.
Factors we considered in determining purchase price. Our Trustees have
determined that the going-private transaction is both substantively and
procedurally fair to the unaffiliated public stockholders. In coming to that
determination, we considered and assessed the following material factors:
o Information concerning the financial performance, condition, business
operations and prospects of Raytech. Our Trustees reviewed Raytech's
current financial condition, financial performance, and growth prospects.
Specifically, the Trustees identified the following factors that, in the
opinion of the Trustees will continue to negatively impact Raytech's
business:
o Raytech is a relatively small supplier of a limited number of
components. Raytech's largest customers have been experiencing
margin erosion due to reduced volume, high labor and benefit costs
and intense foreign competition and there is pressure on them to cut
component costs. As a result, Raytech's customers have demanded
component price reductions. Raytech's largest business segment,
sales to domestic original equipment manufacturers has been
significantly impacted by these price reductions, resulting in a
32.0 percent decrease in gross profit for the quarter ended April 3,
2005, despite achieving 8.9 percent sales growth compared to the
same period in 2004.
o As a result of the general downturn in the American automobile
industry, the business of General Motors, Ford Motor Company and
DaimlerChrysler, Raytech's primary customers for its wet friction
products, and the industry as a whole, has been negatively impacted,
which has, in turn, negatively impacted Raytech's business.
17
o Raytech anticipates that continued increases in the price of raw
materials necessary for the manufacture of its products will further
negatively impact its business. Due to the demand for component
price reductions and the terms of some of its current sales
contracts, Raytech must bear the full expense of these price
increases, further reducing its profit margin.
o The trend in the automotive aftermarket is toward longer
transmission service and replacement cycles due to improved quality,
which will negatively impact Raytech's revenues and margins.
o Raytech has also assumed the liability for the pension plans of
Raymark as part of the Chapter 11 reorganization. The plans are
under funded and Raytech, through an agreement with the Internal
Revenue Service, is providing both current contributions and
catch-up contributions. These funding obligations will continue to
impact Raytech's earnings.
o Cash payment for stock; Financial Condition; Prospects. The going-private
transaction represents an opportunity for the unaffiliated public
stockholders to realize $1.32 per share in cash for their stock. We
believe this price might otherwise be difficult for unaffiliated public
stockholders (especially those stockholders with large holdings of shares)
to realize, in light of the lack of liquidity of the market for shares of
Raytech common stock. We believe that the $1.32 per share consideration to
be paid for shares of Raytech common stock is fair to the unaffiliated
public stockholders. The purchase price substantially exceeds the per
share tangible book value of Raytech common stock which, based on the most
recent unaudited balance sheets of Raytech, was approximately $1.09 at
April 3, 2005.
o Public Company Compliance. Our Trustees also considered that there is an
increased cost to Raytech for compliance with the additional requirements
on public companies under the Sarbanes-Oxley Act of 2002 and related SEC
regulations, among other expenses of being a public company. We expect
these increased costs to continue to adversely impact Raytech's financial
performance. We also expect that this will further impact adversely the
trading price of Raytech's common stock.
o Current Market Prices, Historical Market Prices; Limited Trading Market
and Liquidity. Our board considered the current and historic trading
prices of Raytech's common stock. The stock closed at $1.32 on July 6,
2005. The stock price ranged from $1.01 per share to $2.08 per share
during the twelve months before we announced the going-private transaction
on July 7, 2005. There is a limited trading market for Raytech's stock,
and limited liquidity. The average daily trading volume during the two
months before our announcement of the going-public transaction was less
than 15,000 shares. For all of these reasons, it may be extremely
difficult for the unaffiliated public stockholders to sell their Raytech
stock without adversely impacting the stock's trading price. Our Trustees
also concluded that the stock's trading price may not reflect its fair
value, because of the low trading volume and limited supply and demand for
the stock. On August 1, 2005, Raytech was notified by the NYSE that it is
not in compliance with the NYSE's increased continued listing standards.
Under the rules and procedures of the NYSE, Raytech must respond to the
NYSE within 45 days with a business plan that demonstrates
18
compliance with the continued listing standards. Raytech has stated that
it does not believe that it can take the steps that will permit it to
satisfy the criteria of the NYSE. In the event Raytech's common stock is
delisted, the stock will become even more illiquid.
o Limited Benefits from Being a Public Company. Raytech has not been able to
benefit from being a publicly traded company. Raytech has had limited
access to the public capital markets, because of its limited trading
volume and low trading price of its common stock. Investment banks have
not covered Raytech's stock. We believe that these factors will continue
to negatively impact the trading price of shares of Raytech's common
stock.
o Avoiding continuing declines in stock price. Our Trustees also gave weight
to the possibility of future declines in the stock trading price. Lower
stock prices will negatively impact the unaffiliated public stockholders.
The impending delisting of Raytech's stock from the NYSE and public
capital market trends affecting micro-cap companies (like Raytech), will
result in a reduction in interest by institutional investors.
o Campbell Report. Our Trustees also took note of an analysis that Raytech
obtained from W.Y. Campbell & Company during October 2004. This analysis
was done as part of a review by the Company of its current and future
business prospects. This analysis concluded that the fair value of
Raytech's common stock was between $1.21 and $2.05. Since the date of this
report, the Trustees believe that the price per share has been negatively
impacted by current market and business conditions more fully discussed
above.
o Appraisal rights. Our Trustees also considered the Delaware laws
concerning appraisal rights, in concluding that the purchase price is
fair. The unaffiliated public stockholders are entitled to exercise
appraisal rights and demand payment if the "fair value" for their shares.
A court may determine "fair value" to be more or less than the payment
being made in this going-private transaction.
Factors not considered in determining purchase price. We did not consider
the following factors to be material in determining the fairness of the
going-private transaction:
o No Firm Offers. We are not aware of any firm offers to purchase Raytech's
business that have been made during the past two years by any unaffiliated
person.
o Merger, Sale, or Other Transfer of Assets. Raytech has not engaged in a
merger or consolidation with another company, or in the sale (or other
transfer) of a substantial part of its assets during in the last two
years.
o Securities Purchases. During the past two years, no one has purchased
enough Raytech common stock to exercise control of Raytech.
In addition, we intend to retain our majority holdings in Raytech, and we
do not intend to seek a buyer for Raytech in the immediate future. This fact
foreclosed the opportunity to consider an alternative transaction with a third
party purchaser of Raytech or otherwise provide liquidity in the form of a third
party offer to the unaffiliated public stockholders. Accordingly, it
19
is unlikely that finding a third party buyer for Raytech was a realistic option
for the unaffiliated public stockholders. We also concluded that the absence of
a third party buyer for Raytech shows that the going-private transaction is the
only likely source of prompt liquidity for the unaffiliated public stockholders.
Shopping Raytech would not only entail substantial time delays and
allocation of its management's time and energy, but would also disrupt and
discourage Raytech's employees and create uncertainty among Raytech's customers
and business associates. We do not have any present intention to liquidate our
position in Raytech.
Procedural fairness. Delaware law allows us to effect the merger by action
of our merger subsidiary's board of directors, without any action on the part of
the board of directors or other shareholders of Raytech, but provides Raytech's
public shareholders who object to the merger with the statutory right to have
the "fair value" of their shares determined by a court and paid to them by
following the procedures outlined in Section 262 of the DGCL, which are
described elsewhere in this transaction statement under the heading Item 4(c),
"Terms of the Transaction". A determination of fair value ultimately depends on
an analysis of what a reasonable purchaser would pay for Raytech common stock.
Our Trustees considered appointing a special committee to determine the
fairness of the going-private transaction but decided not to pursue this option.
Our Trustees believe that a special committee would need to retain its own
independent legal counsel and financial advisors to help evaluate the fairness
of the going-private transaction. The cost of hiring counsel and advisors, and
the diversion of management resources to assist the special committee, would
outweigh any benefit that would be derived from a special committee.
Certain negative considerations. Our Trustees evaluated certain factors
which weighed against the fairness of the terms of the going-private transaction
and its procedural fairness. Our Trustees also discussed the absence of key
procedural safeguards. In summary, the going-private transaction does not
protect the unaffiliated public stockholders in the following ways:
1. The unaffiliated public stockholders did not vote to approve or oppose
the going-private transaction.
2. An unaffiliated representative was not appointed to act solely on
behalf of the unaffiliated public stockholders.
3. Raytech's board of directors did not vote to approve or oppose the
going-private transaction.
These negative considerations are described in more detail below:
o Termination of participation in future growth of Raytech. Following the
completion of the going-private transaction, the unaffiliated public
stockholders would cease to participate in future earnings or growth of
Raytech. They would not benefit from any increases in the value of Raytech
stock.
20
o Conflicts of interest. The financial interests of the Trust are adverse to
the financial interests of the unaffiliated public stockholders. In
addition, directors of Raytech have actual or potential conflicts of
interest in connection with the going-private transaction. Two of our
Trustees are also directors of Raytech.
o No public stockholder approval. The unaffiliated public stockholders will
not have an opportunity to vote on the going-private transaction. Our
Trustees believe that this factor is outweighed by the right of the
unaffiliated public stockholders to seek appraisal and payment for the
fair value of their shares under Delaware law.
o No unaffiliated representative or independent director approval. No
special committee of Raytech's directors was appointed to evaluate the
going-private transaction. No independent representative of the
unaffiliated public stockholders was appointed to act solely on their
behalf, to negotiate the terms of the going-private transaction or to
consider its fairness. Our Trustees determined that the costs of hiring
and compensating a representative (including fees for independent legal
and financial advisors to the representative) would have outweighed its
benefit to the unaffiliated public stockholders.
o Raytech's board did not vote. Our Trustees concluded that, had Raytech's
board of directors been asked to consider and vote upon the proposed
going-private transaction, it would have wanted to hire its own
independent legal and financial advisors. These expenses would have
further consumed Raytech's financial resources.
Our Trustees gave these negative factors due consideration. They concluded
that none of these factors (alone or taken together) is significant enough to
outweigh the positive factors and analyses that it considered. Our Trustees
believe that the going-private transaction is fair to the unaffiliated public
stockholders, both substantively and procedurally.
Our Trustees took note of the large number and wide variety of complex
factors that affect the fairness of the going-private transaction to the
unaffiliated public stockholders. Our Trustees did not quantify, rank, or
otherwise assign relative weights to each of the specific factors we considered.
Instead, our Trustees conducted an overall analysis of these factors.
We believe that these factors provide a reasonable basis to form our
belief that the going-private transaction is substantively and procedurally fair
to the unaffiliated public stockholders.
Recent purchases of shares of Raytech Common Stock by the Trust.
The Acquisition. Other than as contemplated by the 2005 Agreement, the
Trust has not engaged in any recent purchases of shares of Raytech Common Stock.
A copy of the 2005 Agreement is attached to this transaction statement as
Exhibit (d).
REPORTS, OPINIONS, APPRAISALS AND NEGOTIATIONS
Report, opinion or appraisal
We did not engage any third parties to perform any independent financial
analysis of the going-private transaction or the value of Raytech's common
stock. We have not received any
21
written report, opinion, or appraisal from an outside party relating to (a) the
fairness of the merger consideration being offered to the unaffiliated public
stockholders or (b) the fairness of the going-private transaction to Raytech or
to its unaffiliated public stockholders.
Raytech engaged the services of an outside party, W.Y. Campbell, to
analyze the business of Raytech. W.Y. Campbell rendered a report to Raytech's
board of directors on October 26, 2004. At that time, the board had been
considering a possible sale of Raytech. The report concluded that Raytech's
value was between $1.21 and $2.05 per share at the time of the report. In
reaching this conclusion, W.Y. Campbell analyzed factors such as the state of
the industry and the overall prospects of Raytech.
Our Trustees gave weight to the findings of this report, and took into
account that it was conducted nine months before the date of this transaction
statement and that since the report was issued additional factors have and we
expect will continue to negatively impact Raytech's business. See "Fairness of
the Going Private Transaction - Factors we considered in determining purchase
price". A copy of the report of W.Y. Campbell is attached to this transaction
statement as Exhibit (e).
In determining the price to pay to the unaffiliated public stockholders,
our Trustees also considered Raytech's substantial costs of being a public
company, including complying with securities laws, increased auditing costs,
potential liabilities under the Sarbanes-Oxley Act of 2002, increased costs of
director and officer liability insurance, the cost of shareholder communications
and public relations, and management inefficiencies created by the public
spotlight.
As part of its analysis, our Trustees had discussions with members of
Raytech's management about its financial condition, its past and current
business operations, its financial condition, future prospects and operations,
and other matters. In addition, our Trustees reviewed other financial studies
and analyses and considered such other information as they considered
appropriate.
22
TRANSACTION STATEMENT
ITEM 1. SUMMARY TERM SHEET.
See the "Summary Term Sheet" section, above.
ITEM 2. SUBJECT COMPANY INFORMATION.
(a) Name and address. The name of the subject company is Raytech
Corporation. The principal executive offices of the subject company are located
at Four Corporate Drive, Suite 295, Shelton, CT, 06484. Its telephone number is
(203) 925-8021.
(b) Securities. The subject company's authorized capital stock consists of
50,000,000 shares of common stock, par value $1.00 per share and 5,000,000
shares of cumulative preferred stock, no par value. As of April 29, 2005,
Raytech has outstanding 41,737,306 shares of common stock, the subject
securities of the going-private transaction, and no shares of preferred stock.
(c) Trading market and price. Raytech's common stock is traded publicly on
the New York Stock Exchange under the symbol "RAY".
The following table shows the high and low common stock prices by quarter
from the NYSE of the Raytech common stock for the periods indicated:
2005 2004 2003
---- ---- ----
HIGH LOW HIGH LOW HIGH LOW
---- --- ---- --- ---- ---
First Quarter $2.00 $1.41 $3.88 $2.75 $7.22 $4.15
Second Quarter 1.71 1.01 3.35 1.45 8.20 3.00
Third Quarter -- -- 2.01 1.20 4.85 3.23
Fourth Quarter -- -- 2.08 1.62 3.94 3.15
(d) Dividends. To our knowledge, Raytech has not paid any cash dividends
on its common stock during the past two years.
(e) Prior public offerings. To our knowledge, Raytech has not made an
underwritten public offering of its common stock during the past three years
that was registered under the Securities Act of 1933 or exempt from registration
under Regulation A.
(f) Prior stock purchases. Please refer to Item 4 "Terms of the
Transaction", below.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
(a) Name and address. The Trust is the person filing this transaction
statement. The business address and business telephone number for the Trust is
190 Willis Avenue, Mineola, New York 11501, and the telephone number is (516)
747-0300.
23
(b) Business background of entity. The Trust is organized under the laws
of the state of New York. Prior to the Acquisition, the Trust, together with its
affiliates, holds approximately 82.86% of the outstanding shares of Raytech
Common Stock. Prior to 1986, Raymark and Raymark Industries, Inc. had been named
as defendants in lawsuits claiming substantial damages for injury or death from
exposure to airborne asbestos fibers. In May 1985, Raytech sold all of its
Raymark stock. Under a restructuring plan, Raytech (through its subsidiaries)
purchased certain non-asbestos related business of Raymark. In spite of the
restructuring plan, Raytech was named a co-defendant with Raymark and other
defendants in numerous asbestos-related lawsuits as a successor in liability to
Raymark. In a lawsuit decided in 1988 by The United States District Court in
Oregon ruled that Raytech was to be a successor to Raymark's asbestos related
liability (Oregon equity law). After several court rulings, including an appeal
to the United States Supreme Court, the Oregon case remained as the prevailing
decision holding Raytech to be a successor to Raymark's asbestos related
liabilities. In order to stay the asbestos related litigation, on March 10,
1989, Raytech filed a petition seeking relief under Chapter 11, Title 11, United
States Code in the United States Bankruptcy Court, District of Connecticut.
In October 1998, Raytech reached a tentative settlement with its creditors
for a consensual plan of reorganization providing for all general unsecured
creditors to receive approximately 90% of the equity in Raytech in exchange for
their claims. The Trust was created under the settlement plan to use its assets
and income to satisfy all asbestos-related claims. As reorganized, Raytech
issued approximately 83% of its common stock to the Trust, 7% to government and
other claimants, and 10% to Raytech's public stockholders at the time. As of the
date of this transaction statement, the Trust owns 34,584,432 shares of
Raytech's common stock (or 82.86% of its outstanding shares).
The Trust is governed by the laws of the State of New York. The Trust was
formed as an irrevocable trust pursuant to the Raytech Corporation Asbestos
Personal Injury Settlement Trust Agreement, effective as of April 18, 2001.
The Trust has not been a party to any judicial or administrative
proceeding during the past five years that resulted in (i) a judgment, decree,
or final order enjoining the Trust from future violations of (or prohibiting
activities subject to) federal or state securities laws, or (ii) a finding of
any violation of federal or state securities laws.
(c) Business and background of natural persons.
(1),(2) The name, business address, position with the Trust, principal
occupation and five-year employment history of each of the Trustees of the
Trust, together with the names, principal business and addresses of any
corporations or other organizations in which such principal occupations are
conducted, are set forth on Schedule I to this transaction statement.
(3) During the last five years, none of the persons listed in Schedule I
to this transaction statement has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(4) None of the persons listed in Schedule I to this transaction statement
has been a party to any judicial or administrative proceeding during the past
five years that resulted in a judgment, decree or final order enjoining those
persons from future violations of, or prohibiting
24
activities subject to, federal or state securities laws, or a finding of any
violation of federal or state securities laws.
(5) The country of citizenship of each of the persons listed in Schedule I
to this transaction statement is listed thereon.
(d) Tender Offer. Not Applicable
ITEM 4. TERMS OF THE TRANSACTION.
(a) Material terms.
(1) Tender offers. Not applicable.
(2) Mergers or similar transactions.
In connection with the plan of Raytech Corporation, Case No. 89-00293,
confirmed by the United States Bankruptcy Court for the District of Connecticut
on August 13, 2000, the Trust entered into an Agreement, dated June 8, 2000, and
Settlement Agreement, dated October 31, 2001, each with United States
Environmental Protection Agency, the Connecticut Department of Environmental
Protection, and FMC Corporation (the "Environmental Creditors"). The purpose of
these agreements was to mutually resolve claims of the Environmental Creditors
against Raytech, Raymark Industries, Inc. and Raymark Corporation. The
agreements provide for the assignment by the Environmental Creditors to the
Trust of their interest in certain assets of Raytech and of the estates of
Raymark and Universal Friction Composites, the division of the proceeds of
Raymark liability insurance and the future transfer by the Environmental
Creditors of the Raytech common stock owned by them.
In consideration for the compromise and settlement of the Environmental
Creditors' claims, the Trust and the Environmental Creditors determined that is
was in each party's interest to accelerate the settlement of the agreements. On
July 7, 2005, the Trust entered into the 2005 Agreement, to accelerate the
consummation of the earlier agreements, pursuant to which the Trust will acquire
3,228,888 shares of Raytech common stock and other assets and consideration from
the Environmental Creditors. Pursuant to the terms of the 2000 and 2001
agreements and under the 2005 Agreement, the Environmental Creditors will
receive $9,457,776, in exchange for the following consideration (the
"Acquisition"):
o the Environmental Creditors' agreement to divide certain insurance
proceeds in the bankrupt estates of Raymark Corporation and Raymark Industries,
Inc.(the "Raymark Estates") 60% to asbestos personal injury creditors and 40% to
Environmental Creditors;
o 3,228,888 shares of Raytech common stock owned by the Environmental
Creditors;
o the Environmental Creditors' assignment to the Trust of their rights to
benefits under an agreement to share tax benefits with the Trust, incorporated
in the Chapter 11 Plan of Reorganization of the Raytech Corporation, confirmed
August 31, 2000;
25
o the Environmental Creditors' interest in the other property of the
Raymark Estates; and
o the Environmental Creditors' interest in the recovery by the Raymark
Estates of proceeds of policies of insurance issued by the Federal Insurance
Company to Raymark Corporation.
Upon completion of the Acquisition, the Trust's ownership of the shares of
Raytech's common stock will increase from approximately 82.86% to approximately
90.6%. The 2005 Agreement contains closing conditions which relate to the
satisfaction of our filing obligations under the Securities Exchange Act of 1934
and the approval of the Acquisition by the Bankruptcy Court.
This transaction statement is being filed because the acquisition of the
shares by the Trust is the first step of a transaction which will result in a
"Rule 13E-3 transaction" (as defined under the Exchange Act).
Upon completion of the Acquisition, the Trust will own approximately 90.6%
of Raytech's outstanding common stock. After completion of the Acquisition, we
intend to undertake a short-form merger. We intend the short-form merger to
result in the acquisition of all of the outstanding shares of Raytech's common
stock owned by unaffiliated public stockholders of Raytech.
To effect the short-form merger, we will organize a wholly-owned
subsidiary corporation ("merger subsidiary") and transfer all of the shares of
Raytech common stock owned by the Trust to the merger subsidiary, causing the
merger subsidiary to own approximately 90.6% of Raytech's outstanding shares.
Our merger subsidiary will then merge into Raytech. Upon the effectiveness of
the merger, each outstanding share of Raytech's common stock owned by the
unaffiliated public stockholders will be canceled. In exchange, our merger
subsidiary will pay the unaffiliated public stockholders the sum of $1.32, in
cash, for each share of Raytech common stock. Upon timely exercise of vested
options, each holder will receive payment of $1.32 per option share. Raytech
will survive the merger.
After the short-form merger, we intend to cause the registration of
Raytech's common stock under the Exchange Act and its listing on the New York
Stock Exchange to be terminated.
The Trust's purpose in engaging in the going-private transaction is to own
all of Raytech's stock. Upon completion of the short-form merger, Raytech will
be wholly-owned by the Trust. The transactions have been structured in order to
effect a prompt and orderly transfer of the minority ownership of Raytech from
the unaffiliated public stockholders to us, and to provide the unaffiliated
public stockholders with cash payments for all of their Raytech common stock as
promptly as practicable.
The consideration to be paid to Raytech's unaffiliated public stockholders
in the short-form merger for their stock will be $1.32, in cash, per share. This
price is equal to last sale price per share of Raytech's common stock on July 6,
2005, the day before the 2005 Agreement was executed and the day before the
first public announcement of the execution of the 2005 Agreement.
26
Under the DGCL, because the merger subsidiary will hold at least 90% of
the outstanding shares of Raytech common stock immediately after the
consummation of the acquisition and prior to the short-form merger, the merger
subsidiary will have the power to effect the merger without a vote of the
Raytech board of directors and without a vote of the unaffiliated public
stockholders. The board of directors of the merger subsidiary will approve the
short-form merger by board resolution in accordance with Section 253 of the
DGCL, and no other vote will be necessary to approve the short-form merger. As a
result, neither Raytech, nor the Trust nor the merger subsidiary is soliciting
proxies or consents from the board of directors of Raytech or the stockholders
of Raytech. The reasons for the going-private transaction are set out in
"Special Factors - Purposes, Alternatives, Reasons and Effects of the
Going-private Transaction - Reasons." Certain federal income tax consequences of
the going-private transactions are set out in "Special Factors - Certain Federal
Income Tax Consequences of the Going-Private Transaction".
Upon completion of the short-form merger, in order to receive the merger
consideration of $1.32 per share, each stockholder or a duly authorized
representative must (1) deliver a Letter of Transmittal, appropriately completed
and executed, to Ira R. Halperin, Esq. and (2) surrender their shares of Raytech
common stock by delivering the stock certificate or certificates that, prior to
the short-form merger, had evidenced those shares to the paying agent, as set
forth in a Notice of Merger and Appraisal Rights and Letter of Transmittal,
which will be mailed to stockholders of record on the effective date.
Stockholders are encouraged to read the Notice of Merger and Appraisal Rights
and Letter of Transmittal carefully when received. Delivery of an executed
Letter of Transmittal shall constitute a waiver of statutory appraisal rights.
For federal income tax purposes, the receipt of the cash consideration by
holders of Raytech common stock pursuant to the short-form merger will be a
taxable sale of the holder's shares. You will recognize taxable gain or loss in
the amount of the difference between $1.32 and your adjusted tax basis for each
share of Raytech common stock that you own at the time of the short-form merger.
See "Special Factors - Certain Federal Income Tax Consequences of the
Going-Private Transaction."
(b) Purchases. Current and former officers and directors of Raytech
beneficially own 720,335 shares of common stock of Raytech, which includes
684,232 shares which the officers and directors as a group hold options to
purchase that are exercisable within the next 60 days. All of the options held
by the officers and directors have exercise prices above the $1.32 purchase
price to be paid to the unaffiliated public stockholders. The current and former
officers and directors will be treated as described in Item 4(a), "Terms of the
Transaction - Material terms - Mergers or similar transactions."
(c) Different terms. All unaffiliated public stockholders of Raytech will
be treated as described in Item 4(a), "Terms of the Transaction - Material terms
- Mergers or similar transactions."
(d) Appraisal rights. Holders of Raytech common stock who properly perfect
their appraisal rights under Section 262 of the DGCL will have the right to seek
an appraisal and to be paid the "fair value" of their shares of Raytech common
stock at the effective time of the short-
27
form merger. The fair value of the Raytech common stock is determined exclusive
of any element of value arising from the expectation or accomplishment of the
short-form merger.
The following is a brief summary of the statutory procedures to be
followed in order for a holder of Raytech common stock to dissent from the
short-form merger and perfect appraisal rights under Delaware law. This summary
is not intended to be complete and is qualified in its entirety by reference to
Section 262, the complete text of which is set forth in Exhibit (f) to this
transaction statement and is incorporated into this transaction statement by
this reference. Any holder of Raytech common stock considering demanding
appraisal of their shares is advised to consult that stockholder's own
independent legal counsel with respect to the availability and perfection of
appraisal rights in the short-form merger.
Notice of the effective date of the short-form merger and the availability
of appraisal rights under Section 262 will be mailed to record holders of the
Raytech common stock by Raytech, as the surviving corporation in the short-form
merger, within 10 calendar days of the effective date of the short-form merger.
This merger notice should be reviewed carefully by the stockholders. Any Raytech
stockholder entitled to appraisal rights will have the right, within 20 days
after the date of mailing of the merger notice, to demand in writing from
Raytech an appraisal of his or her shares. This demand will be sufficient if it
reasonably informs Raytech of the identity of the stockholder and that the
stockholder intends to demand an appraisal of the fair value of his or her
shares. Failure to make a timely demand would foreclose a stockholder's right to
appraisal.
A demand for appraisal must be executed by or for the stockholder of
record, fully and correctly, as the name of the stockholder of record appears on
the stock certificates. If shares of Raytech common stock are owned of record in
a fiduciary capacity, such as by a trustee, guardian or custodian, the demand
for appraisal must be executed by the fiduciary. If shares of Raytech common
stock are owned of record by more than one person, as in a joint tenancy or
tenancy in common, the demand must be executed by all joint owners. An
authorized agent, including an agent for two or more joint owners, may execute
the demand for appraisal for a stockholder of record; provided, however, the
agent must identify the record owner and expressly disclose the fact that, in
exercising the demand, he or she is acting as an agent for the record owner.
A record owner who holds Raytech common stock as a nominee for others,
such as a broker, may exercise appraisal rights with respect to the Raytech
common stock held for all or less than all of the beneficial owners of Raytech
common stock as to which the nominee holder is the record owner. In such a case,
the written demand for appraisal must set forth the number of shares of Raytech
common stock covered by the demand. Where the number of shares of Raytech common
stock is not expressly stated, the demand for appraisal will be presumed to
cover all shares of Raytech common stock outstanding in the name of the record
owner. Beneficial owners who are not record owners and who intend to exercise
appraisal rights should instruct the record owner to comply strictly with the
statutory requirements with respect to the exercise of appraisal rights within
20 days following the mailing of the notice of short-form merger.
Stockholders who elect to exercise appraisal rights must mail or deliver
their written demands to: Ira R. Halperin, Esq., Meltzer, Lippe, Goldstein &
Breitstone, LLP, 190 Willis
28
Avenue, Mineola, New York 11501 or to any other address as is specified in the
notice of merger. The written demand for appraisal should specify the
stockholder's name and mailing address, the number of shares of Raytech common
stock covered by the demand and that the stockholder is demanding appraisal of
his or her shares.
Within 120 calendar days after the effective date of the short-form
merger, Raytech, or any stockholder entitled to appraisal rights under Section
262 and who has complied with the foregoing procedures, may file a petition in
the Delaware Court of Chancery demanding a determination of the fair value of
the shares of Raytech common stock of all stockholders. Raytech is not under any
obligation, and has no present intention, to file a petition with respect to the
appraisal of the fair value of the shares of Raytech common stock. Accordingly,
it is the obligation of the stockholders to initiate all necessary action to
perfect their appraisal rights within the time prescribed in Section 262. If a
stockholder files a petition, a copy of the petition must be served on Raytech.
Within 120 calendar days after the effective date of the short-form
merger, any stockholder of record who has complied with the requirements for
exercise of appraisal rights and, if appraisal rights are available, will be
entitled, upon written request, to receive from Raytech a statement setting
forth the aggregate number of shares of Raytech common stock with respect to
which demands for appraisal have been received and the aggregate number of
holders of such shares of Raytech common stock. This statement must be mailed
within 10 calendar days after a written request therefore has been received by
Raytech or within 10 calendar days after the expiration of the period for the
delivery of demands for appraisal, whichever is later.
In determining "fair value", the Delaware Court of Chancery is to take
into account all relevant factors. In Weinberger v. UOP, Inc., et al., the
Delaware Supreme Court discussed the factors that could be considered in
determining "fair value" in an appraisal proceeding, stating that "proof of
value by any techniques or methods which are generally considered acceptable in
the financial community and otherwise admissible in court" should be considered.
However, Section 262 provides that "fair value" is to be determined exclusive of
any element of value arising from the accomplishment or expectation of the
short-form merger.
Holders of Raytech common stock who seek appraisal of their Raytech common
stock should bear in mind that the "fair value" of their Raytech common stock
determined under Section 262 could be more than, the same as, or less than the
cash consideration paid for the stock in the short-form merger, and that
opinions of investment banking or financial valuation firms as to fairness from
a financial point of view are not necessarily opinions as to "fair value" within
the meaning of Section 262. Moreover, Raytech, as the corporation surviving the
short-form merger, intends to argue in any appraisal proceeding that, for
purposes of the appraisal proceeding, the "fair value" of the Raytech common
stock, as the case may be, is less than that paid in the short-form merger. The
cost of the appraisal proceeding may be determined by the Delaware Court of
Chancery and assessed upon the parties as the Delaware Court of Chancery deems
equitable in the circumstances. Upon application of a dissenting stockholder,
the Delaware Court of Chancery may order that all or a portion of the expenses
incurred by any dissenting stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorneys' fees and the
fees and expenses of experts, be charged pro rata against the value of all
Raytech common stock entitled to appraisal. In the absence of a determination or
assessment, each party bears its own expenses.
29
The Delaware Court of Chancery may require stockholders who have demanded
an appraisal and who hold shares of Raytech common stock represented by
certificates to submit their certificates to the Delaware Court of Chancery for
notation thereon of the pendency of the appraisal proceedings. If any
stockholder fails to comply with this direction, the court may dismiss the
proceedings as to such stockholder.
Any holder of Raytech common stock who has duly demanded appraisal in
compliance with Section 262 will not be entitled to vote the shares of Raytech
common stock subject to the demand for any purpose or to receive payment of
dividends or other distributions on Raytech common stock after the effective
time of the short-form merger, except for dividends or other distributions
payable to stockholders of record at a date prior to the effective time of the
short-form merger.
At any time within 60 days after the effective time of the short-form
merger, any former holder of Raytech common stock will have the right to
withdraw his or her demand for appraisal and to accept the merger consideration
paid for shares of Raytech common stock in the short-form merger. After this
60-day period, the former holder may withdraw his or her demand for appraisal
only with the consent of Raytech, as the corporation surviving the merger. If no
petition for appraisal is filed with the Delaware Court of Chancery within 120
days after the effective time of the merger, stockholders' rights to appraisal
will cease and all stockholders will be entitled to receive the cash
consideration paid for the Raytech common stock. Inasmuch as Raytech has no
obligation to file a petition for appraisal, any stockholder who desires a
petition for appraisal to be filed is advised to file it on a timely basis.
However, no petition timely filed in the Delaware Court of Chancery demanding
appraisal will be dismissed as to any stockholder without the approval of the
Delaware Court of Chancery, and the approval may be conditioned upon any terms
as the Delaware Court of Chancery deems just.
Failure to take any required step in connection with the exercise of
appraisal rights may result in the termination or waiver of the appraisal
rights.
STOCKHOLDERS ARE URGED TO READ EXHIBIT (F) IN ITS ENTIRETY SINCE FAILURE
TO COMPLY WITH THE PROCEDURES SET FORTH THEREIN WILL RESULT IN THE LOSS OF
APPRAISAL RIGHTS.
(e) Provisions for unaffiliated security holders. Raytech does not intend
to grant unaffiliated stockholders special access to its records in connection
with the short-form merger. Neither the Trust nor Raytech intends to obtain
counsel or appraisal services for unaffiliated stockholders of Raytech.
(f) Eligibility for listing or trading. Not applicable.
ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
(a) Transactions. The nature and dollar amount of any transaction, other
than those described in paragraphs (b) or (c) of this Item 5, that occurred
during the past two years, between the Trust or the persons listed on Schedule I
to this transaction statement and Raytech and any affiliate of Raytech is
incorporated herein by reference to Item 13 to Raytech's Annual Report on
30
Form 10-K for the fiscal year ended January 2, 2005. The Form 10-K for its
fiscal year ended January 2, 2005 is available from the SEC's web site at
www.sec.gov and for inspection and copying at the SEC's public reference
facilities located at 450 Fifth Street, N.W., Washington, D.C. 20549. You may
obtain information on the operation of the public reference facilities by
calling the SEC at 1-800-SEC-0330.
(b), (c) See Item 2(f) above and the Section above entitled "Fairness of
the Going-private Transaction - Recent purchases of shares of Raytech common
stock by The Trust". Two of the three Trustees of the Trust are also directors
of Raytech. See Item 3, "Identity and Background of Filing Person" and Schedule
I to this Schedule 13E-3.
(d) Two of the three Trustees of the Trust are also directors of Raytech.
See Item 3, "Identity and Background of Filing Person" and Schedule I to this
Schedule 13E-3.
(e) See Item 4(a)(2) above and the Section above entitled "Fairness of the
Going-private Transaction - Recent purchases of shares of Raytech common stock
by The Trust" for a description of the Acquisition.
ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
(a) Use of securities acquired. The shares of Raytech capital stock will
be canceled in the short-form merger.
(b) Plans. It is currently expected that, following the consummation of
the short-form merger, the business and operations of Raytech will be conducted
by us substantially as they are currently being conducted. We intend to continue
to evaluate the business and operations of Raytech with a view to maximizing its
potential, and we will take the actions deemed appropriate under the
circumstances and market conditions then existing. We intend to cause Raytech to
terminate the registration of its common stock under Section 12 of the Exchange
Act following the short-form merger. This would result in the suspension of
Raytech's duty to file reports pursuant to the Exchange Act. In addition, on
August 1, 2005, Raytech was notified by the NYSE that it is not in compliance
with the NYSE's increased continued listing standards. Raytech is considered
"below criteria" due to the fact that its total market capitalization is less
than $75 million over a 30-day trading period and its stockholders' equity is
less than $75 million. As of August 8, 2005, the NYSE made available on its
consolidated tape, an indicator, "BC," indicating Raytech is below the NYSE's
quantitative continued listing standards. Under the rules and procedures of the
NYSE, Raytech must respond to the NYSE within 45 days with a business plan that
demonstrates compliance with the continued listing standards. Raytech has stated
that it does not believe that it can take steps which will permit it to satisfy
the financial criteria of the NYSE. We do not intend to take any action to
continue Raytech's listing on the NYSE. See "Special Factors - Purposes,
Alternatives, Reasons and Effects of the Going-Private Transaction - Effects."
We do not currently have any commitment or agreement, and we are not
currently negotiating for the sale of any of Raytech's businesses. Except as
otherwise described in this transaction statement, as of the date of this
transaction statement, we have not approved any specific plans or proposals for:
31
o any extraordinary transaction, such as a merger, reorganization or
liquidation, involving Raytech or any of its subsidiaries;
o any purchase, sale or transfer of a material amount of assets of Raytech
or any of its subsidiaries;
o any material change in the present dividend rate or policy, or
indebtedness or capitalization of Raytech. See "Summary Terms Sheet
Consequences of the Going-Private Transaction Effects of the Going-Private
Transaction," "Special Factors Purposes, Alternatives, Reasons and Effects
of the Going-Private Transaction Effects," and "Fairness of the
Going-Private Transaction Factors considered in determining fairness" and
"Certain negative considerations");
o any other material change in the corporate structure or business of
Raytech; or
o any extraordinary corporate transaction involving Raytech after completion
of the short-form merger.
ITEM 7. PURPOSES, ALTERNATIVES, REASONS AND EFFECTS.
See the section above captioned "Special Factors - Purposes, Alternatives,
Reasons and Effects of the Going-Private Transaction."
ITEM 8. FAIRNESS OF THE TRANSACTION.
See the section above captioned "Special Factors - Fairness of the
Going-private Transaction."
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND NEGOTIATIONS.
See the section above captioned "Special Factors - Reports, Opinions,
Appraisals and Negotiations."
ITEM 10. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) Source of funds. The total amount of funds required by the merger
subsidiary to pay the merger consideration to the unaffiliated public
stockholders of Raytech and to option holders of exercised vested options, and
to pay related fees and expenses is estimated to be approximately $5.2 million,
in addition to payment of $9,457,776 million by the Trust for Raytech shares and
other assets to be purchased in connection with the Acquisition. The Trust plans
to fund the Acquisition and the purchase of the shares of common stock from
unaffiliated public stockholders by the merger subsidiary with cash on hand that
is not subject to any financing condition.
(b) Conditions. There are no conditions to financing arrangements for the
going-private transaction, and there are no alternative financing arrangements
or alternative financing plans.
32
(c) Expenses. The paying agent will receive reasonable and customary
compensation for its services and will be reimbursed for certain reasonable
out-of-pocket expenses and will be indemnified against certain liabilities and
expenses in connection with the short-form merger, including certain liabilities
under U.S. federal securities laws.
Except as described under Item 11(b), "Interest in Securities of the
Subject Company - Securities transactions," and Item 14, "Personal Assets,
Retained, Employed, Compensated or Used," we will not pay any fees or
commissions to any broker or dealer in connection with the going-private
transaction. Brokers, dealers, commercial banks and trust companies will, upon
request, be reimbursed by us for customary mailing and handling expenses
incurred by them in forwarding materials to their customers.
The estimated fees and expenses to be incurred by us in connection with
the going-private transaction are set forth in the table below:
Filing fees $ 1,112
Legal fees 250,000
Transfer agent fees 10,000
Printing
mailing costs and other fees 40,000
Total $ 301,112
(d) Borrowed funds. Not applicable.
ITEM 11. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) Securities ownership. Immediately after the consummation of the
Acquisition and on the effective date of the short-form merger, the Trust,
through the merger subsidiary, is expected to be the owner of approximately
37,813,320 shares of Raytech common stock, representing approximately 90.6% of
the outstanding shares of Raytech common stock. Details regarding the beneficial
ownership of the Trust's common stock is set forth in Schedule I to this
transaction statement.
(b) Securities transactions. See Item 4, "Terms of the Transaction",
above.
ITEM 12. THE SOLICITATION OR RECOMMENDATION.
(a) - (e) Not Applicable
ITEM 13. FINANCIAL STATEMENTS.
(a) Financial information.
(1) Incorporated by reference to Raytech's Annual Report on Form
10-K for the fiscal year ended January 2, 2005.
33
(2) Incorporated by reference to Raytech's Quarterly Report on Form
10-Q for the fiscal quarter ended April 3, 2005.
(3) The ratio of earnings to fixed charges, as required, is set
forth under the heading "Selected Financial Data" in the Transaction
Statement.
(4) The book value per share information, as required, is set forth
under the heading "Selected Financial Data" in the Transaction Statement.
The Form 10-K for the fiscal year ended January 2, 2005 and the Form 10-Q
for the fiscal quarter ended April 3, 2005 are available from the SEC's web site
at www.sec.gov and for inspection and copying at the SEC's public reference
facilities located at 450 Fifth Street, N.W., Washington, D.C. 20549. You may
obtain information on the operation of the public reference facilities by
calling the SEC at 1-800-SEC-0330.
(b) Pro forma information. No pro forma data giving effect to the
going-private transaction is provided because the Trust does not believe such
information is material to the unaffiliated public shareholders in evaluating
the proposed transaction since (1) the consideration for Raytech common stock is
all cash and (2) if the proposed transaction is completed, Raytech's common
stock would cease to be publicly traded.
(c) Summary Information. See the information under the heading "Selected
Financial Data" in the Transaction Statement
ITEM 14. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.
(a) Solicitations or recommendations. There are no persons or classes of
persons who are directly or indirectly employed, retained or to be compensated
to make solicitations or recommendations in connection with the going-private
transaction.
(b) Employees and corporate assets. No employees or corporate assets of
Raytech will be used by us or our affiliates in connection with the
going-private transaction.
ITEM 15. ADDITIONAL INFORMATION.
None.
ITEM 16. EXHIBITS.
(a) Letter from Raytech Acquisition Corp. and Letter of Transmittal
(d) Supplemental Settlement Agreement
(e) Report of W.Y. Campbell
(f) Delaware General Corporation Law Section 262
34
SIGNATURE
After due 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.
Dated: August 12, 2005
/s/ Richard A. Lippe
-----------------------------
Richard A. Lippe
Managing Trustee
35
CERTIFICATE
The undersigned, Kevin E. Irwin, Acting Secretary of the Raytech
Corporation Asbestos Personal Injury Settlement Trust, a Delaware trust (the
"Trust"), hereby certifies that attached hereto as Exhibit A are true, correct
and complete copies of resolutions duly adopted by the Trust at the Board of
Trustees meeting on July 6, 2005, approving the acquisition of outstanding
shares of Raytech Corporation not owned by the Trust (the "Resolutions"). The
Resolutions have not been amended, modified or rescinded and are in full force
and effect on the date hereof.
This Certificate shall not create any personal (as opposed to trust)
liability.
IN WITNESS WHEREOF, the undersigned has caused this Certificate to be
executed on behalf of the Trust as of this 11th day of August, 2005.
RAYTECH CORPORATION ASBESTOS
PERSONAL INJURY SETTLEMENT TRUST
By: /s/ Kevin E. Irwin
--------------------------------
Kevin E. Irwin, Acting Secretary
EXHIBIT A
RESOLVED: that after acquiring rights to the Raymark creditors shares of stock
in the Raytech Corporation, the Trust shall acquire all the remaining
outstanding shares of stock of the Raytech Corporation by means of a short-form
merger in the manner previously recommended by special counsel, Mr. Halperin,
thereby resulting in the Raytech Corporation being wholly owned by a wholly
owned subsidiary of the Trust;
FURTHER RESOLVED: that in connection with the short form merger just described,
the Trust shall offer to pay $1.32 per share for its acquisition of the
remaining outstanding shares of stock of the Raytech Corporation held by the
shareholder other than the environmental creditors; and
FURTHER RESOLVED: that Mr. Lippe is authorized, on behalf of the Trust, to
execute any agreements, regulatory filings, or other documents approved by
special counsel to effect this transaction.
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
(a) Letter from Raytech Acquisition Corp. and Letter of
Transmittal
(d) Supplemental Settlement Agreement
(e) Report of W.Y. Campbell
(f) Delaware General Corporation Law Section 262
36
SCHEDULE I
MEMBERS OF THE BOARD OF TRUSTEES OF THE TRUST
Trustees. The name, business address, position with the Trust, present
principal occupation or employment and five-year employment history of the
Trustees of the Trust, together with the names, principal businesses and
addresses of any corporations or other organizations in which such principal
occupation is conducted, are set forth below. Except as otherwise indicated,
each occupation set forth refers to the Trust. Each of the Trustees of the Trust
is a citizen of the United States. To the knowledge of the Trust, no Trustee
beneficially owns shares of Raytech common stock. To the knowledge of the Trust,
no Trustee has been convicted in a criminal proceeding during the last five
years (excluding traffic violations or similar misdemeanors) and no Trustee of
the Trust has been a party to any judicial or administrative proceeding during
the last five years (except for any matters that were dismissed without sanction
or settlement) that resulted in a judgment, decree or final order enjoining him
from future violations of, or prohibiting activities subject to, federal or
state securities laws, or a finding of any violation of federal or state
securities laws.
Position with Principal Occupation or Employment.
Name the Trust Five-Year Employment History.
---- --------- -----------------------------
Richard A. Managing Trustee Partner in the Corporate & Securities Law
Lippe Group of the law firm of Meltzer, Lippe,
Goldstein & Breitstone, LLP, 190 Willis
Avenue, Mineola, New York; Director,
Raytech Corporation since 2002; Managing
Trustee, Keene Creditors Trust.
Archie R. Trustee Director, Midas Inc., 1300 Arlington
Dykes Heights Road Itasca, IL 60143; Director
PepsiAmericas, Inc., 4000 Dain Rauscher
Plaza, 60 South Sixth Street,
Minneapolis, MN 55402; Chairman and Chief
Executive Officer, Fleming Companies,
Inc., 1945 Lakepointe Drive, Lewisville,
TX 73126, a food distribution company
from 2003 to 2004; Chairman and Chief
Executive Officer of Capital City
Holdings, Inc., 4525 Harding Pike,
Nashville, TN 37205, an investment
company, from 1988 to 2003 and Chairman
in 2004; Director, Raytech Corporation
since 2002.
Steven Trustee Professor of political science and
Halpern adjunct professor of law at the State
University of New York at Buffalo, and a
partner at the law firm of Lukasik and
Halpern. His business address is State
University of New York at Buffalo, 509
Park Hall, Buffalo, New York.
37