Schedule 14A Information Statement
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only [as permitted by
Rule 14a-6(e)(2)]
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11 or Sec. 240.14a-12
Raytech Corporation
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[ X ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number or the Form or Schedule and the date of its filing.
1. Amount previously paid:
2. Form, Schedule or Registration No.:
3. Filing party:
4. Date Filed:
<PAGE>
RAYTECH CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
November 20, 1998
Notice is hereby given that an Annual Meeting of
Shareholders of Raytech Corporation will be held at the
Ramada Hotel, 780 Bridgeport Avenue, Shelton, Connecticut, on
November 20, 1998 at 10:00 a.m. for the following purposes:
1. To elect one Class III Director for a full three-year
term and until his respective successor is elected;
2. To ratify the appointment of PricewaterhouseCoopers LLP
as auditors for 1998;
3. To transact such other business as may properly be
brought before the meeting.
Only shareholders of record at the close of business on
October 2, 1998 are entitled to notice of and to vote at the
Annual Meeting of Shareholders or any adjournment or adjournments
thereof.
A proxy statement and proxy are enclosed herewith. If you
are unable to attend the meeting in person, you are urged to
sign, date and return the enclosed proxy promptly in the enclosed
addressed envelope which requires no postage if mailed within the
United States. If you attend the meeting in person, you may
withdraw your proxy and vote your shares. Any person giving a
proxy, whether in attendance and voting in person at the meeting
or not, has the right to revoke it at any time by written notice
provided to the Secretary of the Corporation prior to its being
exercised.
LeGrande L. Young
Secretary
Shelton, Connecticut
October 6, 1998<PAGE>
RAYTECH CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
November 20, 1998
The accompanying proxy is solicited on behalf of the Board
of Directors of Raytech Corporation ("Raytech"), a Delaware
corporation, for use at the Annual Meeting of Shareholders to be
held at the Ramada Hotel, 780 Bridgeport Avenue, Shelton,
Connecticut, on November 20, 1998 at 10:00 a.m. for the following
purposes and as set forth in the accompanying Notice of Annual
Meeting of Shareholders:
1. To elect one Class III Director for a full three-year
term and until his respective successor is elected;
2. To ratify the appointment of PricewaterhouseCoopers LLP
as auditors for 1998;
3. To transact such other business as may properly be
brought before the meeting.
Shares can be voted only if the stockholder is present in
person or by proxy. Shares represented by properly executed
proxies received by Raytech will be voted at the Annual Meeting
in the manner specified therein or, if no specification is made,
will be voted for the election of Directors and for the
appointment of PricewaterhouseCoopers LLP as auditors for 1998.
Execution of a proxy will not in any way affect a shareholder's
right to attend the meeting and vote in person. Any person
giving a proxy, whether in attendance and voting in person at the
meeting or not, has the right to revoke it at any time by written
notice provided to the Secretary of the Corporation prior to its
being exercised.
The representation in person or by proxy of a majority of
the outstanding shares entitled to vote thereat is necessary to
constitute a quorum at the meeting. Directors are elected by a
<PAGE>
plurality of the affirmative votes cast. A majority of the votes
cast at the meeting is required for the appointment of
PricewaterhouseCoopers LLP as auditors for 1998. Abstentions and
"non-votes" are counted as present in determining whether the
quorum requirement is satisfied. For purposes of determining
whether a proposal has received a majority vote, abstentions will
be included in the vote totals with the result that an abstention
has the same effect as a negative vote. Under applicable
Delaware law, "non-votes" will not be included in the vote totals
of proposals voted and, therefore, will have no effect on the
vote of that proposal. A "non-vote" occurs when a broker holding
shares for a beneficial owner votes on one proposal but does not
vote on another proposal because the broker does not have
discretionary voting power and has not received instructions from
the beneficial owner.
There were outstanding at the close of business on
September 11, 1998 3,420,995 shares of Common Stock, par value
$1.00 per share, of Raytech ("Raytech Common Stock"), each share
being entitled to one vote on each matter presented at the Annual
Meeting. Only shareholders of record at the close of business on
October 2, 1998 will be entitled to vote at the Annual Meeting.
The mailing address of the principal executive offices of
Raytech Corporation is Suite 295, Four Corporate Drive, Shelton,
CT 06484. The approximate date on which this Proxy Statement and
the enclosed proxy are first being sent to shareholders is
October 6, 1998. By Delaware Corporation Law, the shareholders
must have notice of this Annual Meeting not less than 10 days
prior to nor more than 60 days prior to the meeting date.
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE AND DOCUMENTS ENCLOSED
This Proxy Statement incorporates by reference the following
document which has been filed by Raytech Corporation with the
Commission (File No. 1-9298) pursuant to the Securities Exchange
Act of 1934: Raytech Corporation's 1997 Annual Report on Form
10-K for the fiscal year ended December 28, 1997. This Proxy
Statement is accompanied by the Notice of Annual Meeting of
Shareholders.
<PAGE>
ELECTION OF DIRECTORS AND INFORMATION
CONCERNING DIRECTORS AND NOMINEES
The Certificate of Incorporation of Raytech Corporation
provides that the Board of Directors shall consist of not more
than nine and not less than three Directors, that the Directors
shall be divided into three classes, designated Class I, Class II
and Class III, as nearly equal in number as may be possible, and
that each class of Directors shall be elected for a term of three
years. The term of office of the Class III Director expires with
the forthcoming Annual Meeting and one Director will be elected
as a Class III Director for a full three-year term and until his
successor is elected and qualified. Under Delaware law, the
election of a nominee as a Director requires the affirmative vote
of the holders of a plurality of the shares of Raytech Common
Stock represented at the meeting.
Set forth below is the name of one person nominated by the
Board of Directors for election as Class III Director and the
names of the other Class I and the Class II Directors, together
with their ages, principal occupations and business experience
during the last five years, present directorships, the year each
first became a Director and the number of shares of Raytech
Common Stock owned by each beneficially, directly or indirectly,
as of October 2, 1998. Except as otherwise indicated, the
persons listed have sole voting and investment power with respect
to shares beneficially owned by them. The nominee is presently
a Director and the nominee and Director was elected a Director at
an Annual Meeting of Shareholders. If the nominee should be
unable to serve as a Director, the person or persons voting the
proxies will select another nominee in his place. Raytech
Corporation has no reason to believe that the nominee will be
unable or unwilling to serve if elected.
<PAGE>
<TABLE>
<CAPTION>
Shares of
Principal Occupation Common Stock
Business Experience Beneficially
During Last 5 Years First Owned
and Present Became Percent
Name Age Directorships Director Total of Class
<S> <C> <C> <S> <C> <C> <C> <C>
Class I (serving until the Annual Meeting of Shareholders in 1999)
Donald P. Miller 66 Retired, formerly 1986 5,818(a) .2%
President and Chief
Executive Officer of
Posi-Seal International,
Inc. until 1986; Director,
Information Management
Assoc., Inc.; Director,
Saab Financial Corp
Robert B. Sims 55 President and Chief 1986 5,818(a) .2%
Executive Officer of
Counselcor LLC since
1996; Prior thereto
Senior Vice President,
Secretary and General
Counsel of Summagraphics
Corporation
Class II (serving until the Annual Meeting of Shareholders in 2000)
Robert M. Gordon 81 Retired, formerly 1986 7,318(a) .2%
President and Vice
Chairman of Raybestos-
Manhattan, Inc.
Frederick J. Mancheski(1) 72 Retired, formerly 1998 0 0%
Chairman of the Board
and Chief Executive
Officer of Echlin Inc.;
Director, Marlin Co.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares of
Principal Occupation Common Stock
Business Experience Beneficially
During Last 5 Years First Owned
and Present Became Percent
Name Age Directorships Director Total of Class
<S> <C> <C> <S> <C> <C> <C>
Albert A. Canosa(2) 52 President and Chief 1998 40,418(b) 1.2%
Executive Officer of
Raytech Corporation;
Previously, Vice
President of Adminis-
tration, Treasurer
and Chief Financial
Officer of Raytech
Corporation
Class III (currently serving and nominated to serve until the Annual Meeting
of Shareholders in 2001)
Robert L. Bennett 60 Principal, Bennett, 1989 12,818(c) .4%
Fisher, Giuliano &
Gottsman, The Electronic
Publishing Group since
1993; Prior thereto,
President and CEO of
Mirror Systems, Inc.;
Director, Southern New
England Telecommunications,
Inc.
<FN>
(1) Appointed by the Board of Directors to fill the vacancy caused by the
resignation of Dennis G. Heiner in July 1998 and to serve his term
remaining.
(2) Appointed by the Board of Directors to fill the vacancy caused by the
resignation of Craig R. Smith in January 1998 and to serve his term
remaining.
(a) Total represents 5,818 shares which the named Director holds the
option to purchase within 60 days.
(b) Total includes 40,418 shares which Mr. Canosa holds the option to
purchase within 60 days.
(c) Total represents 12,818 shares which Mr. Bennett holds the option to
purchase within 60 days.
</FN>
</TABLE>
<PAGE>
Committees of the Board of Directors:
The Board of Directors has designated Executive, Audit,
Compensation and Nominating Committees. The Executive Committee
currently consists of the following Directors: Messrs. Canosa,
Gordon, and Miller.
The Audit Committee, which held two meetings during 1997,
currently consists of the following Directors: Messrs. Bennett,
Gordon and Sims. This Committee's principal responsibilities are
to recommend the engagement or discharge of independent auditors
to the Board; review with independent auditors the plan and
results of the audit engagement; approve services performed by
independent auditors; review the degree of independence of the
auditors; consider the range of audit and non-audit fees; and
review the results of Raytech Corporation's external audit
reports.
The Compensation Committee, which held two meetings during
1997, currently consists of the following Directors: Messrs.
Canosa, Miller and Sims. This Committee's responsibilities are
to approve the remuneration for senior management whose base
salary is $75,000 or greater, to recommend compensation plans for
officers, and to grant and administer benefits under the various
employee benefit plans of Raytech Corporation and its
subsidiaries.
The Nominating Committee currently consists of the following
Directors: Messrs. Bennett and Canosa. This Committee reviews
and recommends to the Board of Directors nominees for election as
Directors at the Annual Meetings of Shareholders and nominees to
fill vacancies in the Board of Directors. Also, this Committee
will consider timely recommendations by shareholders which should
be submitted in writing to the Secretary of Raytech Corporation
and should include a statement as to the qualifications and
willingness to serve on the Board of Directors of recommended
persons.
Meetings of the Board of Directors:
During 1997, there were five regular meetings and five
special meetings of the Raytech Board of Directors. Each
Director attended at least 75% of the meetings of the Board and
committees on which he served.
<PAGE>
Related Party Transactions:
During 1988, the Company repurchased 200,000 shares of its
common stock from Echlin Inc. in exchange for approximately
$1,200,000 of credit on future product sales from the Company to
Echlin, which is pre-petition debt under the Company's bankruptcy
filing. As of September 11, 1998, Echlin's voting interest in
the Company is 15.9%.
Related party transactions involving Craig R. Smith,
formerly a Director and President and Chief Executive Officer of
the Company, are included in the Registrant's Form 10-K for 1997.
DIRECTORS' COMPENSATION
Directors received a $17,000 per year meeting fee plus
$3,000 per year fee for one or more committee appointments in
1997. The Directors are paid the annual Director's meeting fee
or proportion thereof only for scheduled meetings attended. The
committee meeting fee is paid regardless of attendance. There is
no minimum attendance rule and any Director that misses all
meetings would receive no portion of the annual Director's
meeting fee.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of October 2, 1998, the
number and percentage of shares of stock for each person known by
Raytech to be the beneficial owner of 5% or more of the
outstanding shares of Raytech Common Stock and for all of Raytech
Corporation's Officers and Directors as a group. Except as
otherwise indicated, the persons listed have sole voting and
investment power with respect to shares beneficially owned by
them.
Amount and Percent
Name and Address Nature of Beneficial of
of Beneficial Owner Ownership Class
Echlin Inc. 545,010 15.9%
100 Double Beach Road
Branford, CT 06405
FMR Corporation 327,800 9.6%
82 Devonshire Street
Boston, MA 02109
<PAGE>
Amount and Percent
Name and Address Nature of Beneficial of
of Beneficial Owner Ownership Class
Davidson Kempner Partners 232,600 6.8%
885 Third Avenue
New York, NY 10022
Dimension Fund Advisors, Inc. 188,895 5.5%
1299 Ocean Avenue, Suite 650
Santa Monica, CA 90401
All Directors and Officers as
a Group (9 persons) 155,304(a) 4.3%
(a) See "Election of Directors and Information Concerning
Directors and Nominees." Total includes 153,471 shares
with respect to which such Directors and Officers have the
option to purchase within 60 days.
<PAGE>
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Shares of
Common Stock
Beneficially Owned
First Became Percent
Name Age Positions Held Officer Total of Class
<S> <C> <C> <C>
Albert A. Canosa 52 President and 1986 40,418(a) 1.2%
Chief Executive
Officer
John B. Devlin 47 Vice President, 1998 0 0%
Treasurer and Chief
Financial Officer
John J. Easton 53 Vice President, 1991 39,392(b) 1.1%
President of
Subsidiary, Raybestos
Products Company,
since 1987
LeGrande L. Young 62 Vice President, 1986 43,722(c) 1.3%
Administration,
Secretary and
General Counsel
All Directors and Executive Officers as a group (9) 155,304(d) 4.3%
<FN>
(a) Total includes 40,418 shares which Mr. Canosa holds the option to
purchase within 60 days.
(b) Total includes 39,059 shares which Mr. Easton holds the option to
purchase within 60 days.
(c) Total includes 43,722 shares which Mr. Young holds the option to
purchase within 60 days.
(d) Total includes 153,471 shares which the Directors and Executive
Officers as a group hold the option to purchase within 60 days.
</TABLE>
<PAGE>
EXECUTIVE OFFICERS' COMPENSATION
Summary Compensation Table:
The following Summary Compensation Table identifies current, long-term
and stock-related compensation paid to the Chief Executive Officer and the
three most highly compensated executive officers for 1997 and two prior
years:
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards Payouts All Other
Name/ Salary Bonus Options LTIP Compensation
Position (1) Year ($) ($) # $ (2) ($) (3)
<S> <C> <C> <C> <C> <C> <C>
Albert A. Canosa 1997 155,626 166,069 0 0 9,424
President and 1996 149,582 171,087 0 152,078 8,983
Chief Executive 1995 141,062 156,962 0 0 8,642
Officer
John B. Devlin (4)
Vice President,
Treasurer and
Chief Financial
Officer
John J. Easton 1997 145,761 109,321 0 0 11,945
Vice President 1996 140,156 157,674 0 140,155 8,606
1995 134,636 127,230 0 0 8,385
LeGrande L. Young 1997 160,620 161,255 0 0 9,600
Vice President, 1996 154,333 179,808 0 159,030 9,000
Administration, 1995 148,254 152,758 0 0 8,930
Secretary and
General Counsel
Craig R. Smith(5) 1997 283,511 411,419 0 0 9,600
1996 272,369 423,854 0 282,569 9,000
1995 261,641 401,731 0 0 9,000
<FN>
(1) Registrant has only four executive officers, including the CEO.
(2) Payouts pursuant to the Strategic Plan Variable Compensation Program providing
awards for a three-year strategic planning period based upon earnings per share
achievements.
(3) The numbers stated for each year recite Registrant contributions to Messrs. Canosa,
Easton, Young, and Smith under its defined contribution plan [401(k)] in the amounts
of $9,424, $9,030, $9,600 and $9,600, respectively, for 1997; $8,983, $8,606, $9,000
and $9,000, respectively, for 1996; and $8,642, $8,385, $8,930 and $9,000,
respectively, for 1995.
(4) Mr. Devlin was hired in 1998 and accordingly had no compensation in 1997 and
two prior years from the Registrant.
(5) Mr. Smith was formerly President and Chief Executive Officer but was terminated
in January 1998.
</TABLE>
<PAGE>
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Shares Unexercised In-the-Money
Acquired Options Options
on Value at 12/28/97 at 12/28/97
Exercise Realized Exercisable Exercisable
Name (#) ($) (#) ($)
<S> <C> <C> <S> <C> <C> <C>
Albert A. Canosa (CEO) -0- -0- 40,418 $118,150
John J. Easton -0- -0- 39,059 $114,412
LeGrande L. Young -0- -0- 43,722 $127,236
Craig R. Smith(1) -0- -0- 96,784 $275,656
<FN>
(1) Terminated in January 1998.
</TABLE>
<PAGE>
Performance Graph
The following Performance Graph compares the Registrant's
cumulative total shareholder return on its common stock with
certain indexes and peer groups for a five-year period:
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG RAYTECH CORPORATION*, DOW JONES EQUITY
INDEX** AND DOW JONES AUTOMOTIVE PARTS
AND EQUIPMENT INDEX**
Dow Jones
Dow Jones Auto Parts and
Raytech Equity Equipment Index
1992 100 100 100
1993 100 107 121
1994 140 105 102
1995 92 141 123
1996 128 173 136
1997 176 223 170
* Total return assumes reinvestment of dividends.
** Based on closing index on the last trading day of the
calendar year.
Assumes $100 invested on January 3, 1993 in Raytech common
stock, Dow Jones Equity Index, and Dow Jones Automotive
Parts and Equipment Index.
<PAGE>
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors of the
Registrant, consisting of three Directors, makes this report of
its compensation policies applicable to the executive officers
and the basis for the Chief Executive Officer's compensation for
the last completed fiscal year.
The compensation philosophy of the Compensation Committee is
based upon the premise that all salaried personnel should be
eligible to receive additional compensation for outstanding
contribution to the Corporation and consists of the following two
elements: a fixed base salary and a management incentive in
variable amounts in accordance with the levels of eligibility and
performance criteria. The objectives under this philosophy are
to maintain an equitable internal classification of positions by
grade, to maintain compensation opportunity equal to or greater
than the competition, to provide for aggregate compensation
related to performance achievement, to maintain an effective
system of salary planning and control and to provide executives
with the opportunity to earn additional compensation based on
achievement of certain goals for the Corporation and its
shareholders attributable to excellence in management.
To accomplish the compensation objectives, all salaried
positions, including the Chief Executive Officer, are graded to
reflect level of responsibility inherent in the position and
market value. The judgment takes into account the following
factors: organizational relationships, knowledge requirements,
impact potential on corporate profitability, scope of monetary
responsibility and managerial control and the areas of functional
responsibility requiring direction. The Compensation Committee
considers all such factors but places no relative weight on any
of the factors. Though the determination of executive
compensation is performed in an organized manner, using
documented criteria as referenced below, the Compensation
Committee retains full discretionary authority in establishing
executive compensation.
The base salary for executive officers is set in relation to
the base salary policy and practice of other bonus paying
employers in the metalworking/fabricating industry. The data
source for determining the base salary practice of bonus paying
employers is Project 777 - Management Compensation Services, a
division of Hewitt Associates. Other executive compensation
report services relied upon as cross-checks to the Project 777
are AMA - Top Management Compensation Report and Total
Compensation Data Base Middle Market CompBook. These data
sources were selected as models for executives' salaries based
upon the similarities of industry, operations and products to the
Company and the prestige of the sponsoring firms. Special
<PAGE>
surveys may be conducted if the Compensation Committee deems it
appropriate in its discretion but have not done so within the
last three years. The other bonus paying employers used in
establishing the base salary of executives are listed in the
Metal Working/Fabricating Industry Division of Project 777,
consisting of 37 companies only one of which was included in the
line-of-business index in the Performance Graph set forth above.
Of all industry groups of corporations set forth in Project 777,
the metalworking/fabricating group was determined by the
Compensation Committee to be the closest and most fitting in type
of operations, products and job responsibilities to the Company.
The base salaries of executive officers, including the Chief
Executive Officer, were low compared to the surveys listed.
Since this base salary tends to be lower than the salary policy
of non-bonus paying employers, comparable levels of total
compensation are achieved or exceeded only when the variable
element of compensation is added to the base. To strengthen the
executives commitment to improvement of the financial performance
of the Corporation, the amount available for distribution as
variable compensation in any year is determined by either the
return on equity or earnings before tax at the Board's
discretion. The formula necessitates that the Corporation
achieve a stipulated earnings before tax or return on equity goal
before variable compensation is paid. Payment of shareholder
dividends in the year variable compensation is earned is a
prerequisite to payment; provided, however, that such
compensation may be paid in any event if the Board finds that
unusual circumstances justify such payments.
In accordance with the philosophy recited above, the Board
stipulated earnings before tax goals in each of the fiscal years
1995, 1996 and 1997 based upon a Board approved Business Plan for
each year. The stipulated earnings before tax goals were
achieved for the years 1995, 1996 and 1997 resulting in variable
compensation or bonus to the executive officers, including the
Chief Executive Officer, as well as other key employees, in
amounts established in the variable compensation plan. Earnings
before tax are recited in the Registrant's 1997 Annual Report on
Form 10-K incorporated by reference herein. The total
compensation of the executive officers in the years in which
variable compensation or bonus was paid based on performance was
high compared to the Project 777 survey grouping referenced
above.
The bonus opportunities in the 1997 fiscal year for
executive officers and the Chief Executive Officer were therefore
based on the following factors:
(i) Each such position was graded in accordance with the
level of responsibility inherent in the position
including market value, organizational relationships,
knowledge requirements, impact on corporate
<PAGE>
profitability, scope of monetary responsibility, scope
of managerial control and areas of functional
responsibility, all as set forth in the established
compensation plan and was determined to be eligible for
participation in variable compensation.
(ii) The executive officers' positions all received a grade
providing for variable compensation eligibility of 75%
of each executive officer's base salary.
(iii) The Chief Executive Officer's position received a grade
providing for variable compensation eligibility of 100%
of the Chief Executive Officer's base salary.
(iv) The corporate earnings before tax goals stipulated by
the Board for 1997 were met and exceeded in the amount
of 106% resulting in a variable compensation
opportunity to each executive officer of 106% of 75% of
each such officer's base salary and resulting in
variable compensation opportunity to the Chief
Executive Officer of 106% of 100% of such officer's
base salary. Actual variable compensation awarded was
then determined by the evaluation of performance of
each officer to specific written objectives submitted
at the beginning of 1997.
In addition to the variable compensation opportunities based
upon achieving earnings before tax goals annually, the Variable
Compensation Plan provides for long-term variable compensation
opportunities for any three-year strategic planning period
determined by earnings before tax goals established at the Board's
discretion. Being part of the Variable Compensation Plan, the
strategic plan variable compensation program has an identical
philosophy to the annual variable compensation program recited
above. Additionally, the strategic plan variable compensation
program is designed to (i) provide shareholder returns comparable
to other high performance publicly traded companies; (ii)
strengthen key management commitment to improve the long-term
financial performance of the Corporation; (iii) provide key
management with a shareholder perspective; and (iv) focus key
employee resources on technology driven growth.
In accordance with the recited philosophy above, the Board
stipulated annual earnings before tax goals for the strategic
planning period beginning 1994 through 1996. The stipulated
earnings before tax goals were achieved for each of the years
1994, 1995 and 1996 resulting in long-term (three-year) variable
compensation payouts to the executive officers, including the
Chief Executive Officer, as well as other members of the strategic
planning teams, in amounts established in the variable
compensation plan. Each executive officer and the Chief Executive
<PAGE>
Officer were eligible for 100% of base salary. Earnings before
tax are recited in the Registrant's Annual Reports on Form 10-K
for the years referenced above. The maximum award is limited to
100% of eligibility.
Reiterating, the base salary of the Chief Executive Officer is
based upon comparable positions in the metalworking/fabrication
industry grouping of Project 777 and is low in comparison. The
variable or bonus portion of the Chief Executive Officer
compensation is subject to achievement of the earnings goals
referenced above and is high in comparison to total compensation
of other chief executive officers similarly positioned in Project
777. As stated, the achievement of the stipulated earnings before
tax goal was directly related to the variable compensation or
bonus received by the Chief Executive Officer in 1997 as well as
prior years, and the long-term variable compensation related to
strategic planning received in 1996.
The Registrant's contributions under the defined contribution
plan [401(k)] to the executive officers, including the Chief
Executive Officer, were made to all participants in the plan in
accordance with the operative provisions of said plan. Such
provisions, which apply to all participants, provide for a basic
Company contribution, a matching Company contribution and a
supplemental Company contribution. Only the supplemental Company
contribution is discretionary under the plan and if granted is
made to all participants.
The Registrant currently has not established any policy with
respect to qualifying compensation paid to executive officers
under Section 162(m) of the Internal Revenue Code. In the event
such a policy is established, it will be included in this
Compensation Committee Report on Executive Compensation.
The preceding Performance Graph compares the Registrant's
cumulative total shareholder return on its common stock with the
Dow Jones Equity Market Index and the Dow Jones Automotive
Equipment and Parts Industry. The Dow Jones Equity Market Index
was selected as a broad equity market index comparison in place
of Standard & Poor's 500 for the reasons that the Registrant is
not included in the Standard & Poor's 500 and such Index includes
companies that trade on the same exchange and some companies that
are of comparable market capitalization. The Dow Jones
Automotive Equipment and Parts Industry Index was selected in
lieu of a Registrant-constructed peer group index for the reasons
that difficulties were encountered in presenting the requisite
peer comparison due to a very limited peer group and such peers
essentially being privately held companies or subsidiaries or
divisions of larger publicly held companies which necessary data
to draw a comparison is not publicly available. Further, the Dow
<PAGE>
Jones Automotive Equipment and Parts Industry Index includes
companies that trade in the same industry and have similar market
capitalizations.
Compensation Committee
Albert A. Canosa
Donald P. Miller
Robert B. Sims
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors recommends PricewaterhouseCoopers LLP
as the independent accountants for Raytech in 1998. This
recommendation is being presented to the shareholders for their
ratification at the Annual Meeting. If the appointment of
PricewaterhouseCoopers LLP is not approved by the affirmative
vote of the holders of a majority of the shares of Raytech Common
Stock voted at the Annual Meeting, the matter of appointment of
independent auditors will be reconsidered by the Audit Committee
and the Board. Coopers & Lybrand L.L.P. served as the
independent accountants for Raytech in 1997. In July 1998
Coopers & Lybrand L.L.P. merged with Price Waterhouse LLP to form
PricewaterhouseCoopers LLP. Representatives of
PricewaterhouseCoopers will attend the Annual Meeting with an
opportunity to make a statement if they desire to do so and will
be available to respond to questions.
OTHER MATTERS
On March 10, 1989 Raytech Corporation filed a petition
seeking relief under Chapter 11 of Title 11, United States Code
in the United States Bankruptcy Court, District of Connecticut.
For more information, refer to Raytech's 1997 Annual Report to
Shareholders and its Annual Report on Form 10-K for the fiscal
year-ended December 28, 1997.
The Board of Directors knows of no matters other than those
mentioned in this Proxy Statement which will be presented at the
Annual Meeting. However, if any other matters do properly come
before the Annual Meeting, the person or persons voting the
proxies will vote upon them in their discretion and in accordance
with their best judgment.
<PAGE>
DEADLINE FOR SUBMISSION OF SHAREHOLDER
PROPOSALS TO BE PRESENTED TO 1999 ANNUAL
MEETING OF SHAREHOLDERS
Any proposal intended to be presented by any shareholder for
action at the 1999 Annual Meeting of Shareholders of Raytech
Corporation must be received by the Secretary at Suite 295, Four
Corporate Drive, Shelton, CT 06484, not later than January 15,
1999 in order for such proposal to be included in the Proxy
Statement and proxy relating to the 1999 Annual Meeting of
Shareholders. Nothing in this paragraph shall be deemed to
require Raytech Corporation to include in its Proxy Statement and
proxy relating to the 1999 Annual Meeting of Shareholders any
shareholder proposal which does not meet all of the requirements
for such inclusion established by the Securities and Exchange
Commission at that time in effect.
SOLICITATION OF PROXIES
Proxies will be solicited by mail and may also be solicited
by personal interview, telephone and telegram by Directors and
regular officers and employees of Raytech Corporation who will
not be additionally compensated therefor. In that connection,
Raytech Corporation will arrange for brokerage houses, nominees
and other custodians holding shares of Raytech Common Stock of
record to forward proxy soliciting material to the beneficial
owners of such shares, and will reimburse such record owners for
the reasonable out-of-pocket expenses incurred by them.
ADDITIONAL INFORMATION AVAILABLE
Raytech Corporation files an Annual Report on Form 10-K with
the Securities and Exchange Commission. Stockholders may obtain
a copy of this report (without exhibits), without charge, by
writing to the Secretary at Suite 295, Four Corporate Drive,
Shelton, CT 06484.
Raytech Corporation
LeGrande L. Young
Secretary
October 6, 1998
<PAGE>
Edgar Format Appendix
Pursuant to Rule 304(a) of Regulation S-T, following is a list of
all graphic or image information contained in the paper format
version of Raytech Corporation's 1998 Notice of Annual Meeting of
Stockholders, Proxy Statement and form of Proxy:
Page 13 contained a line graph, with the horizontal axis
labeled in years from December 1992 through December 1997,
and the vertical axis labeled in dollars from 0 to 210, in
increments of 20, on which such data contained in the table
on page 13 of the attached EDGAR format version of the Proxy
Statement is represented by three lines, labeled Raytech
Corporation, Dow Jones Equity Index and Down Jones Auto
Parts and Equipment Index, respectively. The data
represented in the graph and a key to the lines contained in
the graph, is set forth below the graph.
<PAGE>
PROXY CARD
RAYTECH CORPORATION
Proxy Solicited on Behalf of Board of Directors
The undersigned hereby appoints Albert A. Canosa and
LeGrande L. Young or either of them with full power of substitution
proxies to vote at the Annual Meeting of Stockholders of Raytech
Corporation (the "Company") to be held at the Ramada Hotel, 780
Bridgeport Avenue, Shelton, Connecticut, on November 20, 1998 at
10:00 a.m., local time, and at any adjournment or adjournments
thereof, hereby revoking any proxies heretofore given, to vote all
shares of common stock of the Company held or owned by the
undersigned as directed on the reverse side of this card, and in
their discretion upon such other matters as may come before the
meeting.
(To be Signed on Reverse Side)
- -------------------------------------------------------------------
/ / Please mark your
votes as in this
example.
For Withheld
Nominee Nominee
1. Election Nominee:
of / / / / Robert L. Bennett
Director
For, except vote withheld from the
following nominee:
2. Ratify the appointment of For Against Abstain
PricewaterhouseCoopers LLP as
auditors for 1998. / / / / / /
Signature(s) Date
Note: Please sign exactly as name appears hereon. Joint
owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please give
full title as such.
