SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No. )
Filed by the registrant / /
Filed by a party other than the registrant /X/
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 Rule 14a-11(c) or Rule
14(a)-12
Restructuring Acquisition Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
Kenneth Schlesinger
- --------------------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of filing fee (check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
/ / 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:
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- --------------------------------------------------------------------------------
(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 Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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RESTRUCTURING ACQUISITION CORPORATION
555 Madison Avenue
New York, New York 10022
June 10, 1996
Dear Stockholders:
You are cordially invited to attend the Special Meeting of Stockholders
of Restructuring Acquisition Corporation, which will be held at the offices of
Olshan Grundman Frome & Rosenzweig LLP at 505 Park Avenue, New York, New York
10022, on Friday, June 21, 1996, at 10:00 A.M., local time.
Information about the Special Meeting, including a listing and
discussion of the matters on which the Stockholders will act, may be found in
the enclosed Notice of Special Meeting and Proxy Statement.
We hope that you will be able to attend the Special Meeting. However,
whether or not you anticipate attending in person, I urge you to complete, sign
and return the enclosed proxy card promptly to ensure that your shares will be
represented at the Special Meeting. If you do attend, you will, of course, be
entitled to vote in person, and if you vote in person such vote will nullify
your proxy.
Sincerely,
STEVEN MIZEL
Chairman of the Board,
Chief Executive Officer
and President
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. PLEASE
READ THE ATTACHED PROXY STATEMENT CAREFULLY, AND COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED
ENVELOPE.
<PAGE>
Restructuring Acquisition Corporation
555 Madison Avenue
New York, New York 10022
-------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
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To our Stockholders:
NOTICE IS HEREBY GIVEN that the Special Meeting of Stockholders of
Restructuring Acquisition Corporation, which will be held at the offices of
Olshan Grundman Frome & Rosenzweig LLP at 505 Park Avenue, New York, New York
10022, on Friday, June 21, 1996, at 10:00 A.M., local time, for the following
purposes:
1. To approve the Company's Plan of Dissolution, Complete
Liquidation and Termination of Existence ; and
2. To consider and act upon such other business as may properly
come before the Special Meeting or any adjournments thereof.
Only stockholders of record at the close of business on June 6, 1996
will be entitled to notice of, and to vote at, the Special Meeting.
PLEASE SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY, WHETHER OR NOT YOU
PLAN TO ATTEND THE SPECIAL MEETING, IN ORDER THAT YOUR SHARES MAY BE VOTED FOR
YOU. A RETURN ENVELOPE IS PROVIDED FOR YOUR CONVENIENCE.
By Order of the Board of Directors
STEVEN WOLOSKY
Secretary
Dated: New York, N.Y.
June 10, 1996
<PAGE>
Restructuring Acquisition Corporation
555 Madison Avenue
New York, New York 10022
--------------------------
PROXY STATEMENT
FOR
SPECIAL MEETING OF STOCKHOLDERS
June 10, 1996
--------------------------
This Proxy Statement is being furnished to the stockholders of
Restructuring Acquisition Corporation, a Delaware corporation (the "Company" or
"RAC"), in connection with the solicitation by the Board of Directors of the
Company of proxies ("Proxies") for the Special Meeting of Stockholders (the
"Special Meeting") to be held at the offices of Olshan Grundman Frome &
Rosenzweig LLP at 505 Park Avenue, New York, New York 10022, on Friday, June 21,
1996, at 10:00 A.M. At the Special Meeting, the stockholders will be asked to
approve the Plan of Dissolution, Complete Liquidation and Termination of
Existence (the "Plan" or the "Plan of Dissolution") of the Company substantially
in the form attached as Annex A hereto. It is expected that the Notice of
Special Meeting, Proxy Statement and form of Proxy will first be mailed to
stockholders on or about June 10, 1996.
PROXIES AND VOTING RIGHTS
Only stockholders of record at the close of business on Thursday, June
6, 1996 (the "Record Date") will be entitled to notice of, and to vote at, the
Special Meeting and any adjournments thereof. As of the close of business on the
Record Date, there were 1,995,000 outstanding shares of the Company's Common
Stock. Each outstanding share of Common Stock is entitled to one vote. There was
no other class of voting securities of the Company outstanding on the Record
Date. A majority of the outstanding shares of Common Stock present in person or
by proxy is required for a quorum.
Shares of Common Stock represented by Proxies, which are properly
executed, duly returned and not revoked, will be voted in accordance with the
instructions contained therein. If no specification is indicated on the Proxy,
the shares of Common Stock represented thereby will be voted in favor of the
Plan of Dissolution and for any other matter that may properly be brought before
the Special Meeting in accordance with the judgment of the person or persons
voting the Proxy.
Abstentions may be specified on all proposals and will be counted as
present for purposes of the item on which the abstention is noted. Since the
proposal to adopt the Plan requires the
<PAGE>
approval of a majority of the outstanding shares of Common Stock, abstentions
will be counted as a vote against the Plan. Brokers that do not receive
instructions concerning the approval of the Plan of Dissolution may not vote
these shares, and such withheld votes are known as "broker non-votes." Broker
non-votes will also be counted as votes against the Plan.
The execution of a Proxy will in no way affect a stockholder's right to
attend the Special Meeting and vote in person. Any Proxy executed and returned
by a stockholder may be revoked at any time thereafter if written notice of
revocation is given to the Secretary of the Company prior to the vote to be
taken at the Special Meeting, or by execution of a subsequent Proxy which is
presented to the Special Meeting, or if the stockholder attends the Special
Meeting and votes by ballot, except as to any matter or matters upon which a
vote shall have been cast pursuant to the authority conferred by such Proxy
prior to such revocation.
The management of the Company knows of no matters which are to be
presented for consideration at the Special Meeting other than those specifically
described in the Notice of Special Meeting of Stockholders, but, if other
matters are properly presented, it is the intention of the persons designated as
proxies to vote on them in accordance with their judgment.
The cost of solicitation of the Proxies being solicited on behalf of
the Board of Directors will be borne by the Company. In addition to the use of
the mails, proxy solicitation may be made by telephone, telegraph and personal
interview by officers, directors and employees of the Company. The Company will,
upon request, reimburse brokerage houses and persons holding shares in the names
of their nominees for their reasonable expenses in sending soliciting material
to their principals.
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<PAGE>
GENERAL
THE COMPANY
RAC is a Specified Purpose Acquisition Company ("SPAC"), incorporated
under the laws of the State of Delaware on May 14, 1993, the objective of which
was to acquire an operating business which requires a restructuring of its
balance sheet to continue or expand its business operations ("Business
Combination").
The Company was to proceed with a Business Combination only if a
majority of all of the outstanding shares of RAC were voted in favor of the
Business Combination. Additionally, if 20% or more in interest of Stockholders
of RAC (excluding, for this purpose, the Stockholders of RAC prior to the
Company's initial public offering (the "Initial Stockholders")) voted against
the Business Combination, RAC would not be permitted to consummate such Business
Combination.
On May 10, 1996, a Special Meeting of Stockholders was called in which
the Company's Stockholders voted against an Amended and Restated Implementation
Agreement and Plan of Merger and Acquisition between the Company, Media
Technology Corporation, Ltd. ("MediaTech"), MediaTech Holdings, Ltd. and Media
Technology Corporation Ltd. In the Proxy Statement delivered to Stockholders in
connection with the Agreement, the Stockholders of RAC were notified that if RAC
did not consummate a Business Combination by May 12, 1996, RAC would be
dissolved pursuant to the RAC Certificate of Incorporation (the "RAC
Certificate") and would distribute to all of its stockholders excluding the
Initial Stockholders (the "Public Stockholders"), in proportion to their
ownership of RAC Common Stock, an amount equal to the amount in a trust account
(the "Trust Fund") which was set up with 90% of the net proceeds from the
Company's initial public offering ("IPO"). As of June 1, 1996, the Trust Fund
contained approximately $8,728,865, inclusive of interest. As of such date the
Public Stockholders held 1,620,000 shares of Common Stock.
The Company's principal executive offices are located at 555 Madison
Avenue, 17th Floor, New York, New York 10022. Its telephone number is
212-838-4173.
REASONS FOR THE DISSOLUTION
The RAC Certificate limits the duration in which the Company is able to
consummate a Business Combination. The RAC Certificate provides that if RAC does
not consummate a Business Combination within 18 months from the consummation of
its IPO or November 12, 1995, or 24 months from the consummation of the IPO or
May 12, 1996 if certain extension criteria have been satisfied, the officers of
the Company are required to take all actions so that the Company would be
dissolved and would distribute to all Public Stockholders, in proportion to
their respective equity interests in the Trust Fund.
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<PAGE>
Since the Company was unable to consummate a Business Combination by
May 12, 1996, the RAC Board of Directors adopted a resolution to dissolve the
Company in accordance with the RAC Certificate. In addition pursuant to the
provisions of the RAC Certificate, the Board of Directors considered a number of
other factors in reaching its conclusion to liquidate which included the ongoing
accounting, legal and other expenses that would be incurred by the Company in
maintaining its existence as a public company. The Initial Stockholders have
waived their respective rights to receive any of the proceeds in the Trust Fund.
Therefore, at June 1, 1996, upon liquidation, the Public Stockholders will
receive approximately $8,728,865 or $5.39 per RAC Share held by the Public
Stockholders. The Public Stockholders will not receive any liquidation
distribution with respect to any Warrants owned by them.
REQUIRED VOTE
Pursuant to Delaware law, the RAC Certificate and the bylaws of RAC
(the "RAC Bylaws"), the affirmative vote of the holders of at least a majority
of the outstanding shares of RAC Common Stock is necessary to approve the Plan
of Dissolution.
DESCRIPTION OF THE PLAN
PROVISION FOR LIABILITIES; LIQUIDATING DISTRIBUTIONS
The Plan provides for the complete liquidation and dissolution of
the Company in accordance with the provisions of the Delaware General
Corporation Law (the "DGCL"). The Plan provides that the Public Stockholders
will receive their proportionate amounts in the Trust Fund upon surrender of
their stock certificates.
The Company does not plan to satisfy all of its liabilities and
obligations prior to making distributions to stockholders . In addition, the
Company does not have sufficient assets available to establish a contingency
reserve to adequately provide for the payment of all liabilities and obligations
of the Company. While the Company plans to satisfy all of its current and future
obligations and liabilities, the stockholders of the Company may be required to
return all or a portion of the liquidating distributions made to them to satisfy
such obligations. See "Stockholders' Continuing Liability."
SURRENDER OF STOCK CERTIFICATES
As a condition to the receipt of any distribution under the Plan,
stockholders will be required to surrender their certificates evidencing Common
Stock to the Company or its agent for cancellation. If a stockholder's
certificate evidencing the Common Stock has been lost, stolen or destroyed, the
stockholder may be required to furnish the Company with satisfactory evidence of
the loss, theft or destruction thereof, together with a surety bond or other
indemnity, as a condition to the receipt of any
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<PAGE>
distribution. Distributions under the Plan will be in complete redemption and
cancellation of all of the outstanding Common Stock.
Once the Board of Directors determines the date on which
stockholders should surrender their certificates, the Company will cause a
notice and transmittal form to be sent to stockholders, which will advise the
stockholders of the procedures to be followed for the surrender of certificates
representing shares of Common Stock. Stockholders should not submit their stock
certificates to the Company or its transfer agent before receiving instructions
to do so.
AMENDMENTS AND MODIFICATIONS; ABANDONMENT
Notwithstanding the adoption of the Plan by the Company's
stockholders, the Board of Directors, in its discretion, may amend or modify the
Plan without further stockholder approval to the extent permitted by the DGCL.
LIQUIDATING TRUST
If advisable for any reason to complete the liquidation and
distribution of the Company's assets to its stockholders, the Board of Directors
at any time may transfer to a liquidating trust the remaining assets of the
Company. The trust thereupon would succeed to all of the then remaining assets
and liabilities of the Company. The sole purpose of a liquidating trust would be
to complete the liquidation of the Company as contemplated by the Plan.
The Company has no present plan to use a liquidating trust, but
the Board of Directors believes the flexibility provided by the Plan with
respect to the liquidating trust to be advisable.
PROCEDURES FOR DISSOLUTION
Pursuant to the DGCL, following adoption of the Plan by the
stockholders of the Company, the Company will file with the Secretary of State
of the State of Delaware a certificate of dissolution. The dissolution of the
Company will become effective, in accordance with the DGCL, upon proper filing
of the certificate of dissolution with the Secretary of State or upon such later
date as may be specified in the certificate. The Board of Directors currently
anticipates that the certificate of dissolution will be filed and become
effective promptly following the approval of the Plan by the stockholders.
Pursuant to the DGCL, the Company will continue to exist for three
years after the dissolution becomes effective or for such longer period as the
Delaware Court of Chancery shall direct for the purpose of prosecuting and
defending suits, whether civil, criminal or administrative, by or against it,
and enabling the Company gradually to settle and close its business, to dispose
of and convey its property, to discharge its liabilities and to distribute to
stockholders any remaining assets, but not for the
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<PAGE>
purpose of continuing the businesses for which the Company was organized.
MANAGEMENT OF THE COMPANY FOLLOWING ADOPTION OF THE PLAN
It is anticipated that the present directors and officers of the
Company will continue to serve in such capacities following the adoption of the
Plan. After the certificate of dissolution is filed, the Company does not intend
to hold any further annual meetings of stockholders. Directors and officers
currently in office will continue in office until a successor is duly elected
and qualified or until their resignation or removal. The Plan provides that, in
the event of the resignation or removal of a director or officer, the remaining
directors, or, if there are none, the remaining officers, shall have the
authority to fill the vacancy or vacancies created.
Following the adoption of the Plan by the stockholders, the
Company's activities will be limited to winding up its affairs and taking such
actions as may be necessary to preserve the value of its assets. The Board of
Directors and, if authorized by the directors, the officers of the Company, will
have the authority to do or authorize any and all acts and things provided for
in the Plan and any and all further acts and things they may consider necessary
or desirable to carry out the purposes of the Plan.
Following the adoption of the Plan, the Company will continue to
indemnify its directors, officers, employees and agents in accordance with its
certificate of incorporation, bylaws and contractual arrangements for actions
taken in connection with the implementation of the Plan and the winding up of
the affairs of the Company.
RECORD DATE; EFFECT ON LISTING AND TRADING OF THE COMMON STOCK
If the Plan is approved by stockholders, promptly thereafter the
Board of Directors intends to designate a record date (the "Final Record Date")
for the purpose of determining the stockholders entitled to receive the proceeds
in the Trust Fund. All liquidating distributions will be made pro rata to
stockholders of record on the Final Record Date based on their respective
stockholdings on the Final Record Date.
The Common Stock currently is traded through the electronic OTC
Bulletin Board Service of the National Association of Securities Dealers, Inc.
The Company intends to close its stock transfer books on the Final Record Date
and at such time cease recording stock transfers and issuing stock certificates
(other than replacement certificates and certificates issued to reflect
transfers by will, intestate succession or operation of law). It is not expected
that trading of the Common Stock will continue through the OTC Bulletin Board
Service. Accordingly, no further trading of the Company's shares is expected to
occur after the Final Record Date.
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<PAGE>
STOCKHOLDERS' CONTINUING LIABILITY
The Plan contemplates that liquidating distributions will be made
to stockholders only in an amount equal to the proceeds in the Trust Fund, which
under its terms can not be used to satisfy liabilities and obligations of the
Company. While the Company believes that the distributions to the stockholders
of the amounts in the Trust Fund may not be used to satisfy these obligations,
in the event a court were to determine that the Company failed to pay or make
adequate provision for its liabilities and obligations prior to a liquidating
distribution, a creditor of the Company could seek an injunction against the
making of any distributions under the Plan on the grounds that the amounts to be
distributed were needed to provide for the payment of the Company's liabilities
and obligations. In addition, pursuant to Section 282 of the DGCL, after a
liquidation distribution is made, the stockholders of the Company may be held
personally liable for the payment of any claim against the Company which it is
unable to satisfy, but such personal liability by statute cannot exceed the
lesser of the stockholders' pro rata share of the claim or the amount
distributed to such stockholder pursuant to the Plan.
The Company does not have sufficient assets outside of the Trust
Fund available to establish a contingency reserve to adequately provide for the
payment of all liabilities and obligations of the Company. The Company believes
it will be able to satisfy its current liabilities from its existing cash
outside of the trust fund and other assets available to the Company. While the
Company plans to satisfy all of its liabilities and obligations, the
stockholders of the Company may be required to return all or a portion of the
liquidating distributions made to them to satisfy such liabilities or
obligations.
STOCKHOLDER REJECTION OF THE PLAN
If the stockholders reject the Plan at the Special Meeting, the
Board of Directors will explore the alternatives available to the Company. Such
alternatives could include a further attempt to locate a business that might be
interested in engaging in a merger or similar transaction with the Company and
the resubmission of a plan of complete liquidation and dissolution to the
Company's stockholders. The Board of Directors currently is not aware of any
alternative business opportunities for the Company. Unless the Company were to
merge with or otherwise acquire an operating business, the Company's assets
would continue to consist primarily of cash and short-term investments, and the
Company could be required to register as an "investment company" under the
Investment Company Act of 1940. As long as the Company continues in existence,
the Company will be required to incur accounting, legal and other administrative
costs which will be paid from its remaining assets.
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<PAGE>
NO APPRAISAL RIGHTS
Under Delaware law, stockholders of the Company are not entitled
to appraisal rights or similar dissenters' rights for shares of Common Stock in
connection with the transactions contemplated by the Plan.
REGULATORY APPROVALS
The Company is not aware of any material governmental approvals
that are required for the implementation and consummation of the Plan.
FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following discussion is a general summary of the federal
income tax consequences that will result from the liquidation of the Company and
the distribution of its assets to its stockholders. This summary does not
discuss all aspects of federal income taxation that may be relevant to a
particular stockholder or to certain types of persons subject to special
treatment under federal income tax laws (for example, life insurance companies,
tax-exempt organizations or financial institutions) and does not discuss any
aspects of state, local or foreign tax laws which may be applicable to a
particular stockholder. Distributions pursuant to the Plan may occur at various
times and in more than one tax year. No assurances can be given that the tax
treatment described herein will continue to apply unchanged at the time of such
distributions.
This summary is not intended as a substitute for careful tax
planning, particularly because certain of the tax consequences of the Plan may
not be the same for all stockholders. Stockholders are urged to consult their
personal tax advisors with specific reference to their own tax situation.
CONSEQUENCES TO THE COMPANY
The Company will continue to be subject to income tax on its
taxable income until it completes the distribution of all of its assets to
stockholders. Upon any distribution by the Company of property to its
stockholders, the Company generally will recognize gain or loss as if such
property were sold to the stockholders at its fair market value. The Company
does not anticipate that it will distribute to stockholders any property on
which it would recognize gain or loss.
CONSEQUENCES TO STOCKHOLDERS
On receipt of liquidating distributions from the Company, each
stockholder will recognize gain or loss equal to the difference between (i) the
sum of the amount of cash and the fair market value (at the time of
distribution) of any property
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distributed to the stockholder, and (ii) the stockholder's tax basis in his or
her shares in the Company. A stockholder's tax basis in his or her shares
depends on various factors, including the stockholder's cost and method of
acquisition of such shares, and the amount and nature of any distributions the
stockholder previously has received from the Company with respect to such
shares. Gain or loss recognized by a stockholder will be capital gain or loss
provided the shares are held as capital assets. A stockholder's capital gain or
loss on receiving liquidating distributions will be long-term if the holding
period for such shares is more than one year, and short-term if the holding
period is one year or less.
A stockholder's gain or loss will be computed on a "per share"
basis, so that each stockholder must allocate liquidating distributions from the
Company equally to each share of the stock of the Company which he or she owns
and compare such allocated portion of the liquidating distributions with his or
her tax basis in such share, to calculate the gain or loss for such share. If
the Company pays the liquidating distributions in installments, each stockholder
must first recover his or her basis in the shares owned by the stockholder
against the value of the distributions which he or she receives before
recognizing any gain or loss. Thus, if the Company pays liquidating
distributions to its stockholders in installments, each stockholder will
recognize gain on an installment only to the extent that the aggregate value of
such installment, and all prior installments he or she received with respect to
a share, exceeds the tax basis in that share, and will recognize a loss with
respect to a share only when he or she has received the final installment, and
then only if the aggregate value of the liquidating distributions from the
Company with respect to the share is less than the tax basis in the share.
The Company expects that all distributions to stockholders will be
made in cash. If the Company makes a liquidating distribution of property to a
stockholder, the stockholder's tax basis in the property will be its fair market
value at the time of distribution, and the holding period for the property will
begin at the time of distribution.
LIQUIDATING TRUST
If the Company transfers its assets to a liquidating trust, the
stockholders will be treated for tax purposes as having received their pro rata
share of such assets when the transfer occurs. The amount of the taxable
distribution to the stockholders on the transfer of the Company's assets to the
liquidating trust will be reduced by the amount of the Company's known
liabilities which the liquidating trust assumes or to which such transferred
assets are subject. The liquidating trust itself generally will not be subject
to tax, and, after the formation of the liquidating trust, each stockholder will
take into account for federal income tax purposes his or her allocable portion
of any income, gain, deduction or loss which the liquidating trust recognizes.
Distributions of assets by the liquidating trust to the
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stockholders will not be taxable to them. Each stockholder should be aware that
he or she may be liable for tax as a result of the transfer of assets by the
Company to the liquidating trust and the ongoing operations of the liquidating
trust, even if the liquidating trust has not made any actual distributions to
stockholders with which to pay such tax. The Company currently does not intend
to transfer its assets to a liquidating trust.
STATE AND LOCAL INCOME TAX
Stockholders also may be subject to state and local taxes.
Stockholders should consult their tax advisors regarding the state and local tax
consequences of the Plan.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF RAC
RAC is SPAC, incorporated under the laws of the State of Delaware on
May 14, 1993, the objective of which is to acquire an operating business which
requires a restructuring of its balance sheet to continue or expand its business
operations.
In July 1993, RAC consummated a bridge financing (the "Bridge
Financing") in order to pay certain organizational expenses, the costs of the
Bridge Financing and certain costs of the IPO. Six investors in the Bridge
Financing loaned an aggregate of $150,000 to RAC and were issued promissory
notes in that amount, bearing interest at the rate of 10% per annum and payable
at the consummation of the IPO.
The IPO was consummated on May 12, 1994 and May 27, 1994 and raised net
proceeds of approximately $8,530,000 after payment of offering expenses and
repayment of the Bridge Financing promissory notes and interest.
RAC's management was given broad discretion with respect to the
specific application of the net proceeds of the offering, although substantially
all of the net proceeds were intended to be generally applied toward
consummating a Business Combination with an operating business which requires a
restructuring of its balance sheet to expand or continue its operations. A
majority of the net proceeds were placed in the Trust Fund until the earlier of
(i) the consummation of a Business Combination or (ii) liquidation of RAC. The
Trust Fund indenture limits investments to U.S. Government securities with
maturity of 180 days or less. The remaining proceeds were used to pay for
business, legal and accounting due diligence on prospective acquisitions, and
continuing general and administrative expenses in addition to other expenses.
Substantially all of RAC's working capital needs subsequent to the
offering were attributable to the identification, evaluation and selection of a
suitable target business and, thereafter, to structure, negotiate and consummate
a business combination with such target business.
Since its inception, RAC has sought a prospective Target Business and
in so doing has incurred total expenses of $416,324. These expenses are
primarily attributable to office service expenses of $100,000, insurance
expenses of $75,000, state franchise and other taxes of $73,734 and professional
fees of $36,223. See "Financial Statements of RAC."
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PRINCIPAL STOCKHOLDERS AND SECURITY
OWNERSHIP OF MANAGEMENT OF RAC
The following table sets forth certain information regarding beneficial
ownership of the shares of Common Stock of RAC as of February 1, 1996 unless
otherwise noted, by (i) each stockholder known by RAC to be the beneficial owner
of more than 5% of the outstanding Common Stock, (ii) each director of RAC and
(iii) all directors and executive officers as a group. Except as otherwise
indicated, RAC believes that the beneficial owners of the shares of Common Stock
listed below, based on information furnished by such owners, have sole
investment and voting power with respect to such shares, subject to community
property laws where applicable.
Number of Shares Percentage
Name of Stockholder Beneficially Owned(2) Beneficially Owned
- ------------------------------ --------------------- --------------------
Steven M. Mizel(1)............ 273,750 13.7%
Robert A. Arcoro.............. 37,500 1.8%
Steven Wolosky................ 30,000 1.5%
All Executive Officers
and Directors as a group
(3 persons)................... 341,250 17.1%
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(1) The stockholder's address is 555 Madison Avenue, 17th Floor, New York,
New York 10022.
(2) The shares of Common Stock owned by all of the foregoing have been
placed in escrow with Continental Stock Transfer & Trust Company, as
escrow agent, until May 4, 1997. During such escrow period such persons
will not be able to sell or otherwise transfer their respective shares
of Common Stock, however such persons will retain voting rights with
respect to their shares.
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INTEREST OF CERTAIN PERSONS IN THE DISSOLUTION
In July 1993, RAC issued an aggregate of 500,000 shares of Common Stock
for an aggregate purchase price of $500, or $.001 per share, to its Initial
Stockholders. As of February 28, 1994, such stockholders contributed 125,000 of
such shares to the capital of RAC.
Walker Street Investors, Inc. ("Walker Street") has agreed that, until
the acquisition of a Target Business, it will make available to RAC a small
amount of office space, as well as certain office and secretarial services, as
may be required by RAC from time to time. RAC paid Walker Street $5,000 per
month for such services . Steven M. Mizel, RAC's Chairman of the Board,
President and Chief Executive Officer, is the sole stockholder of Walker Street.
Management believes that the arrangement with Walker Street was on terms at
least as favorable as would be available from an unaffiliated third party.
Other than the $5,000 per month administrative fee paid to Walker
Street and legal fees payable to Olshan Grundman Frome & Rosenzweig LLP, of
which Steven Wolosky, RAC's Vice President, Secretary, Treasurer and a Director
is a partner, no compensation will be paid to any Initial Stockholder of RAC.
Olshan Grundman Frome & Rosenzweig LLP has agreed to waive approximately
$100,000 in fees and expenses owed by RAC to such firm for legal services
rendered in connection with the merger with MediaTech and matters relating to
the dissolution of the Company.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The current directors and executive officers of the Company are as
follows:
NAME AGE POSITION
Steven M. Mizel 56 Chairman of the Board, President
and Chief Executive Officer
Robert A. Arcoro 44 Executive Vice President and
Director
Steven Wolosky 40 Vice President, Treasurer,
Secretary and Director
Steven M. Mizel has been the Chairman of the Board, President and Chief
Executive Officer of the Company since its inception. Mr. Mizel founded and,
since May, 1990 has been Managing General Partner of, Croyden Associates, a
financial advisor to companies undergoing restructurings and bankruptcy
reorganizations. He is also the sole stockholder of Walker Street , which
provides general financial advisory services. From 1988 until 1990, he was
President, Chairman of the Board and Chief Executive Officer of
-13-
<PAGE>
Kaufmann Alsberg & Co., Inc., a member firm of the New York Stock Exchange which
invested in undervalued companies, companies undergoing bankruptcy and out of
court reorganizations and in proprietary transactions consisting mainly of
merger arbitrage and convertible arbitrage. From 1985 until January, 1988, Mr.
Mizel was Senior Executive Vice of MDC Holdings Inc., a New York Stock Exchange
listed real estate, homebuilding and financial services company. From 1977 until
1988, he held various positions with Mizel Petro Resources, an oil and gas
exploration company which merged with MDC Holdings, Inc. in 1985, serving as its
Chairman of the Board and Chief Executive Officer from 1985 until 1988. In
addition, Mr. Mizel has played significant roles on shareholder and bondholder
committees of companies undergoing both in court and out of court
reorganizations. Mr. Mizel was a co-financial advisor to the unofficial
preferred shareholders' committee of Harcourt Brace Jovanovich, Inc. during its
reorganization in 1992, a co-financial advisor to the unofficial bondholders'
committee of Businessland Inc. during its acquisition by JWP Inc. in 1991,
chairman of the official equity committee of Basix Corporation during its
Chapter 11 reorganization held from 1988 through 1990, chairman of the
unofficial preferred shareholders' committee of Southland Corporation during its
Chapter 11 reorganization during 1990 and 1991, and a member of the official
bondholders' committee of each of Maxicare Inc. (1989-1990) and Sunshine
Precious Metals (1991- 1992) during their Chapter 11 reorganizations.
Robert A. Arcoro has been the Executive Vice President and a Director
of the Company since its inception. Mr. Arcoro is President of Arkaid
Incorporated, a financial advisory and real estate consulting firm which he
founded in July 1985 and which specializes in advising companies undergoing both
in-court and out- of-court reorganizations. Through Arkaid, Mr. Arcoro has
advised the Fleet Financial Group in certain of their investments with troubled
companies and in the Blackstone Group on its investments with real estate
companies which are seeking to restructure. Mr. Arcoro has also advised
Health-Tex Inc. in its corporate reorganization resulting in a cessation of its
retail operations. Prior to founding Arkaid, Mr. Arcoro was a vice president of
Manufacturers Hanover Trust Company where he participated in corporate
reorganizations. Mr. Arcoro received a B.B.A. from Hofstra University and an
M.B.A. from New York University.
Steven Wolosky has been Vice President, Treasurer, Secretary and a
Director of the Company since its inception. He has been a partner of the New
York City law firm of Olshan Grundman Frome & Rosenzweig LLP since January 1987,
and has practiced law since 1980. Mr. Wolosky's current practice includes
restructurings securities law, corporate finance and mergers and acquisitions.
Mr. Wolosky is also Assistant Secretary of Wheeling-Pittsburgh Corp., a New York
Stock Exchange listed company, and a Director of Uniflex, Inc., an American
Stock Exchange listed company. Mr. Wolosky is a member of the bar of the State
of New York and received a B.S. from Brooklyn College and a J.D. from Benjamin
N. Cardozo Law School.
-14-
<PAGE>
Restructuring Acquisition Corporation
Proforma Liquidating Balance Sheet
June 1, 1996
(Unaudited)
ASSETS
US Government securities
deposited in trust funds
and accrued interest thereon 8,728,865
=========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Liquidating distribution to
stockholders 8,728,865(1)
============
Number of Common Shares
outstanding 1,620,000(2)
============
Liquidating value per share
at June 1, 1996 $5.39
=====
(1) Assumes that upon liquidation, the US government securities deposited
in a trust fund will be returned to investors with accrued interest
thereon. This amount excludes cash and cash equivalents which will be
used to settle current and future liabilities of the company.
(2) Includes only those shares issued in the public offering.
-15-
<PAGE>
MARKET PRICE INFORMATION
Since May 1994, the RAC Common Stock has been listed on the OTC
Bulletin Board. The following table sets forth, for the periods indicated, the
high and low reported closing bids for RAC Common Stock, as reported on the OTC
Bulletin Board. The RAC Common Stock commenced trading on May 4, 1994. The
information with respect to the OTC Bulletin Board reflects inter-dealer
quotations without retail mark-ups, mark-downs or commissions and may not
represent actual transactions.
RAC COMMON STOCK
OTC ELECTRONIC BULLETIN BOARD
HIGH LOW
1994:
Second Quarter.......................... 4 1/4 4
Third Quarter........................... 4 1/4 3 3/4
Fourth Quarter......................... 4 1/4 3 5/8
1995:
First Quarter........................... 4 1/2 3 5/8
Second Quarter.......................... 4 11/16 4
Third Quarter........................... 4 3/4 4
Fourth Quarter.......................... 4 13/14 4
1996:
First Quarter........................... 5 1/16 4
Second Quarter (through June 1, 1996). 5 3/8 4
On May 10, 1996 (the last trading day prior to the public announcement
of the dissolution), the high asked and low bid prices of the RAC Common Stock,
as reported on the OTC Bulletin Board were $5 3/8 and $5 1/16, respectively.
Stockholders are urged to obtain current market quotations.
-16-
<PAGE>
PROPERTIES
Walker Street , a company wholly-owned by Steven M. Mizel, RAC's
Chairman of the Board, Chief Executive Officer and President, has agreed that,
until the consummation of the Dissolution, it will make available to RAC a small
amount of office space, as well as certain office and secretarial services, as
may be required by RAC from time to time. RAC has paid Walker Street a fee of
$5,000 per month for such services.
LEGAL MATTERS
The Company is not a party to any legal proceeding.
MISCELLANEOUS
If the Plan is approved by the stockholders, the Company does not
intend to hold any future annual meetings of stockholders. If the Plan is not
approved by the stockholders, or if, after its approval, the Plan is abandoned
by the Board of Directors, the Company may hold one or more annual or special
meetings in the future. If any stockholder desires to submit a proposal to be
included in the proxy materials for a future meeting of stockholders, such
proposal must be submitted in writing to the Secretary of the Company a
reasonable time before the solicitation of proxies for such meeting is made.
The Board of Directors does not know of any matters to be
presented for consideration at the Special Meeting other than as described in
the Proxy Statement. However, if any other matters are properly presented at the
meeting, it is the intention of the persons named as proxies to vote in
accordance with their judgment on such matters, subject to direction by the
Board of Directors.
-17-
<PAGE>
RESTRUCTURING ACQUISITION CORPORATION
(a corporation in the development stage)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, December 31,
1995 1994
---- ----
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 275,867 $ 464,120
U.S. Government securities deposited in trust fund
and accrued interest thereon (Note 1) 8,555,874 8,105,443
Prepaid insurance 15,000 15,000
Deferred merger costs (Note 7) 63,601 -0-
Organization costs, net of accumulated amortization of $12,107 and $4,657,
respectively 25,145 32,595
---------- ----------
$8,935,487 $8,617,158
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Accrued expenses and taxes $ 210,545 $ 47,568
Commitments (Note 4)
Common stock, subject to possible conversion, 323,999 shares at
conversion value (Note 1) 1,710,320 1,620,278
Preferred stock, $.001 par value - shares authorized 1,000,000; none issued
(Note 5) -0- -0-
Common stock, $.001 par value - shares authorized 20,000,000;
outstanding 1,995,000 and 1,995,000 (Notes 1 and 6) 1,671 1,671
Additional paid-in capital 6,954,679 6,954,679
Retained earnings (deficit) accumulated during the development stage 58,272 (7,038)
---------- ----------
$8,935,487 $8,617,158
========== ==========
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.
<PAGE>
RESTRUCTURING ACQUISITION CORPORATION
(a corporation in the development stage)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Period
May 14, 1993
Year ended Year ended (date of inception) to
December 31, 1995 December 31, 1994 December 31, 1995
----------------- ----------------- -----------------
<S> <C> <C> <C>
Income:
Interest income $ 470,171 $ 245,597 $ 715,768
--------- --------- ---------
Expenses:
Investment banking fees -0- 50,000 50,000
Office services (Note 4) 60,000 40,000 100,000
Interest and amortization (Note 3) 7,450 19,339 40,617
Insurance expense 45,000 30,000 75,000
Shareholder fees and expenses 11,857 15,517 27,374
State franchise and other taxes 58,404 15,330 73,734
Professional fees 21,679 14,544 36,223
Miscellaneous expenses 1,116 701 1,817
Travel and entertainment 11,559 -0- 11,559
--------- --------- ---------
Total expenses 217,065 185,431 416,324
--------- --------- ---------
Income before taxes 253,106 60,166 299,444
Federal income tax (current) 97,754 6,951 104,705
--------- --------- ---------
Net income $ 155,352 $ 53,215 $ 194,739
========= ========= =========
Net income per share $ .08 $ .04
========= =========
Weighted average common shares outstanding 1,995,000 1,404,205
========= =========
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.
<PAGE>
RESTRUCTURING ACQUISITION CORPORATION
(a corporation in the development stage)
STATEMENTS OF COMMON STOCK, COMMON STOCK SUBJECT TO POSSIBLE CONVERSION,
PREFERRED STOCK, ADDITIONAL PAID-IN CAPITAL AND RETAINED EARNINGS (DEFICIT)
PERIOD FROM MAY 14, 1993 (DATE OF INCEPTION) TO DECEMBER 31, 1995
<TABLE>
<CAPTION>
Retained Earnings
(Deficit)
Common stock accumulated
subject to Additional during the
Common stock possible conversion Preferred stock paid-in-capital development stage
------------ ------------------- --------------- --------------- -----------------
No. of shares Amount No. of shares Amount No. of shares Amount Amount Amount
------------- ------ ------------- ------ ------------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, May 14, 1993 - - - - - - - -
Original issuance of
common stock 375,000 $ 375 - - - - $ 125 -
Net (loss) for the
period May 14, 1993
to December 31, 1993 - - - - - - - $ (13,828)
--------- ------ ------- ---------- ------ ----- ---------- ---------
Balance, December 31, 1993 375,000 375 - - - - 125 (13,828)
Sale of common stock in
public offering, net of
underwriting discounts
and offering expenses 1,296,001 1,296 323,999 $1,573,853 - - 6,954,554 -
Net income for the year
ended December 31, 1994 - - - - - - - 53,215
Accretion to redemption
value of common stock - - - (46,425) - - - 46,425
--------- ------ ------- ---------- ------ ----- ---------- ---------
Balance,December 31, 1994 1,671,001 $1,671 323,999 $1,620,278 - - $6,954,679 $( 7,038)
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.
<PAGE>
RESTRUCTURING ACQUISITION CORPORATION
(a corporation in the development stage)
STATEMENTS OF COMMON STOCK, COMMON STOCK SUBJECT TO POSSIBLE CONVERSION,
PREFERRED STOCK, ADDITIONAL PAID-IN CAPITAL AND RETAINED EARNINGS (DEFICIT)
PERIOD FROM MAY 14, 1993 (DATE OF INCEPTION) TO DECEMBER 31, 1995
<TABLE>
<CAPTION>
Retained Earnings
(Deficit)
Common stock accumulated
subject to Additional during the
Common stock possible conversion Preferred stock paid-in-capital development stage
------------ ------------------- --------------- --------------- -----------------
No. of shares Amount No. of shares Amount No. of shares Amount Amount Amount
------------- ------ ------------- ------ ------------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance forward
previous page 1,671,001 $1,671 323,999 $1,620,278 - - $6,954,679 $( 7,038)
Net income for
the year ended
December 31, 1995 - - - - - - - 155,352
Accretion to
redemption value
of common stock - - - 90,042 - - - ( 90,042)
---------- ------ -------- ---------- ---- ---- ---------- --------
Balance,December 31, 1995 1,671,001 $1,671 323,999 $1,710,320 - - $6,954,679 $ 58,272
========= ====== ======= ========== ==== ==== ========== =========
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.
<PAGE>
RESTRUCTURING ACQUISITION CORPORATION
(a corporation in the development stage)
STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash
<TABLE>
<CAPTION>
Period
May 14, 1993
(date of inception)
Year ended Year ended to
December 31, December 31, December 31,
1995 1994 1995
---- ---- ----
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net income $ 155,352 $ 53,215 $ 194,739
------------ ------------ ------------
Adjustments needed to reconcile net income to net
cash used in operating activities:
Amortization of financing costs -0- 9,405 16,000
Amortization of organization costs 7,450 4,657 12,106
Accrued interest earned on U.S. Government securities ( 450,431) ( 232,243) ( 682,674)
Increase (decrease) in accrued expenses 162,977 ( 17,432) 210,546
Increase in prepaid insurance -0- ( 15,000) ( 15,000)
------------ ------------ ------------
Total adjustments ( 280,004) ( 250,613) ( 459,022)
------------ ------------ ------------
Net cash used in operating activities ( 124,652) ( 197,398) ( 264,283)
------------ ------------ ------------
Cash Flows From Investing Activities:
U.S. Government securities deposited in Trust Fund, May 1994 -0- ( 7,873,200) ( 7,873,200)
Cumulative maturities of U.S. Government Securities
deposited in Trust Fund 46,021,682 12,009,520 58,031,202
Cumulative acquisitions of U.S. Government Securities
deposited in Trust Fund ( 46,021,682) ( 12,009,520) ( 58,031,202)
Increase in deferred merger costs ( 63,601) -0- ( 63,601)
------------ ------------ ------------
Net used in investing activities ( 63,601) ( 7,873,200) ( 7,936,801)
------------ ------------ ------------
Cash Flows From Financing Activities:
Proceeds from notes payable -0- -0- 150,000
Repayment of notes payable -0- ( 150,000) ( 150,000)
Decrease in accrued interest on notes payable -0- ( 7,233) -0-
Proceeds from public offering of units, net -0- 8,529,703 8,529,703
Proceeds from sale of stock to founding stockholders -0- -0- 500
Deferring financing costs -0- 199,130 ( 16,000)
Organization costs -0- ( 37,252) ( 37,252)
------------ ------------ ------------
Net cash provided by financing activities -0- 8,534,348 8,476,951
------------ ------------ ------------
Net increase (decrease) in cash and cash equivalents ( 188,253) 463,750 275,867
Cash and cash equivalents, beginning of period 464,120 370 -0-
------------ ------------ ------------
Cash and cash equivalents, end of period $ 275,867 $ 464,120 $ 275,867
============ ============ ============
Supplementary disclosures:
Interest paid $ -0- $ 5,277 $ 12,510
Income taxes paid 6,951 -0- 6,951
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.
<PAGE>
RESTRUCTURING ACQUISITION CORPORATION
(a corporation in the development stage)
SUMMARY OF ACCOUNTING POLICIES
INCOME TAXES
The Company follows Statement of Financial Accounting Standards No. 109 (FAS
109), "Accounting for Income Taxes". FAS 109 is an asset and liability approach
that requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been recognized in the
Company's financial statements or tax returns. Deferred taxes have not been
material to date.
NET INCOME PER SHARE
Net income per common share is computed on the basis of the weighted average
number of common shares outstanding during the period including common stock
equivalents (unless antidilutive) which would arise from the exercise of stock
warrants.
ORGANIZATION COSTS
Organization costs are being amortized over 60 months.
CASH EQUIVALENTS AND TRUST FUND
For purposes of the statement of cash flows, the company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents.
U.S. Government securities deposited in Trust Fund represents a U.S. treasury
bill purchased on December 28, 1995 and maturing on March 28, 1996. The cost of
this security was $8,551,965.
INVESTMENTS
The Company adopted Statement of Financial Accounting Standards No. 115 (FAS
115), "Accounting for Certain Investments in Debt and Equity Securities",
effective January 1, 1994, with no material impact on the Company's financial
position.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
<PAGE>
RESTRUCTURING ACQUISITION CORPORATION
(a corporation in the development stage)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND BUSINESS OPERATIONS
Restructuring Acquisition Corporation ("Company") was incorporated in
Delaware on May 14, 1993 with the objective of acquiring an operating
business which requires a restructuring of its balance sheet. The
Company's founding directors and advisors purchased 500,000 common
shares, $.001 par value, for $500 during the month after incorporation.
On February 28, 1994, 125,000 shares were returned to the Company by
the founding stockholders. This reduced the common stock outstanding to
375,000 shares and adjusted the founding stockholders' percentage
ownership to 20% of the common stock expected to be outstanding after
the Offering which is discussed in Note 2. This return of shares has
been retroactively reflected in the financial statements. The Company
has selected December 31 as its fiscal year end.
The Company consummated the Offering in May, 1994 and raised net
proceeds of $8,530,000 (Note 2). The Company's management has broad
discretion with respect to the specific application of the net proceeds
of the Offering, although substantially all of the net proceeds of the
Offering are intended to be generally applied toward consummating a
business combination with an operating business which requires a
restructuring of its balance sheet ("Business Combination").
Furthermore, there is no assurance that the Company will be able to
successfully effect a Business Combination. Upon the closing of the
Offering, $7,873,200 was deposited in an interest-bearing trust account
("Trust Fund") to be held until the earlier of (i) the consummation of
a Business Combination or (ii) liquidation of the Company. The Trust
Fund indenture limits investments to U.S. Government securities with a
maturity of 180 days or less. The remaining proceeds will be used to
pay for business, legal and accounting due diligence on prospective
acquisitions, and continuing general and administrative expenses in
addition to other expenses.
The Company, after signing a definitive agreement for the acquisition
of a target business, will submit such transaction for stockholder
approval. In the event that 20% or more of the stockholders excluding,
for this purpose, those persons who were stockholders prior to the
Offering, vote against the Business Combination, the Business
Combination will not be consummated. All of the Company's stockholders
prior to the Offering, including all of the officers, directors and
advisors of the Company ("Initial Stockholders") have agreed to vote
their shares of common stock in accordance with the vote of the
majority in interest of all other stockholders of the Company ("Public
Stockholders") with respect to any Business Combination. After
consummation of the Company's first Business Combination, all of these
voting safeguards will no longer be applicable.
<PAGE>
RESTRUCTURING ACQUISITION CORPORATION
(a corporation in the development stage)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND BUSINESS OPERATIONS (CONT'D)
With respect to the first Business Combination which is approved and
consummated, any Public Stockholder who voted against the Business
Combination may demand that the Company convert his shares. The per
share conversion price will equal the amount in the Trust Fund as of
the record date for determination of stockholders entitled to vote on
the Business Combination divided by the number of shares held by Public
Stockholders. The Company will not consummate a Business Combination if
20% or more in interest of the Public Stockholders exercise their
conversion rights. Accordingly, Public Stockholders holding 19.99% of
the aggregate number of shares owned by all Public Stockholders may
have their shares converted in the event of a Business Combination.
Such Public Stockholders are entitled to receive their per share
interest in the Trust Fund computed without regard to shares held by
Initial Stockholders. Accordingly, 19.99% of the net proceeds from the
Offering has been classified as common stock subject to possible
conversion in the accompanying balance sheet at the conversion value.
The Company's Certificate of Incorporation provides for mandatory
liquidation of the Company, without stockholder approval, in the event
that the Company does not consummate a Business Combination within 24
months from the consummation of the Offering (May 1996). In the event
of liquidation, it is likely that the per share value of the residual
assets remaining available for distribution (including Trust Fund
assets) will be less than the initial public offering price per share
in the Offering (assuming no value is attributed to the Warrants
contained in the Units offered in the Offering discussed in Note 2).
(2) PUBLIC OFFERING
On May 12, 1994 and May 27, 1994, the Company sold 1,500,000 and
120,000 units ("Units") respectively in its initial public offering
("Offering"). Each Unit consists of one share of the Company's common
stock, $.001 par value, and two Redeemable Common Stock Purchase
Warrants ("Warrants"). Each Warrant entitles the holder to purchase
from the Company one share of common stock at an exercise price of
$5.00 for a period of six years commencing one year from the effective
date of the Offering. The Warrants will be redeemable at a price of
$.01 per Warrant upon 30 days notice at any time, only in the event
that the last sale price of the common stock is at least $8.50 per
share for 20 consecutive trading days ending on the third day prior to
date on which notice of redemption is given.
<PAGE>
RESTRUCTURING ACQUISITION CORPORATION
(a corporation in the development stage)
NOTES TO FINANCIAL STATEMENTS
(3) NOTES PAYABLE
During 1993 the Company issued an aggregate of $150,000 of promissory
notes to certain accredited investors. These notes bore interest at the
rate of 10% per annum and were repaid on the consummation of the
Offering with accrued interest thereon of $12,510. In addition, the
investors were issued 300,000 warrants (valued at a nominal amount)
which are identical to the Warrants discussed in Note 2, except that
they are not redeemable by the Company until 90 days after the
consummation of a Business Combination.
(4) COMMITMENTS
The Company presently occupies office space provided by a related
company owned by certain stockholders. Such related company has agreed
that, until the acquisition of a target business by the Company, it
will make such office space, as well as certain office and secretarial
services, available to the Company, as may be required by the Company
from time to time. The Company has been paying such related company
$5,000 per month for such services commencing on the effective date of
the Offering.
(5) PREFERRED STOCK
The Company is authorized to issue 1,000,000 shares of preferred stock
with such designations, voting and other rights and preferences as may
be determined from time to time by the Board of Directors.
(6) COMMON STOCK
At December 31, 1995, 3,840,000 shares were reserved for issuance upon
exercise of redeemable warrants and underwriters' warrants.
(7) PROPOSED MERGER
On September 18, 1995, the Company announced a proposed merger
agreement with Media Technology Limited, an Australian Company (Media
Tech). Media Tech is a developing company in the business of point to
multi-point data broadcast through the use of the vertical blanking
interval (the "VBI") that composes a part of all television signals. As
of November 3, 1995, the Company & Media Tech entered into an Amended
and Restated Implementation Agreement and Plan of Merger and
Acquisition (the Implementation Agreement), whereby the Company's
stockholders would ultimately retain a minority interest in Media Tech
RAC, Inc. a newly formed Delaware corporation and a wholly owned
subsidiary of Media Tech. The merger is subject to, among other things,
the approval of 80% of the Company's stockholders. Costs relating to
this merger, primarily professional fees, aggregated $63,601 as of
December 31, 1995 and have been deferred.
<PAGE>
RESTRUCTURING ACQUISITION CORPORATION
(a corporation in the development stage)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
March 31, 1996 1995
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 136,121 $ 275,867
U.S. Government securities deposited in trust fund
and accrued interest thereon (Note 1) 8,655,215 8,555,874
Prepaid insurance 3,750 15,000
Deferred merger costs (Note 7) 128,169 63,601
Organization costs, net of accumulated amortization
of $13,970 and $12,107, respectively 23,282 25,145
---------- ----------
$8,946,537 $8,935,487
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Accrued expenses and taxes $ 188,488 $ 210,545
Commitments (Note 4)
Common stock, subject to possible conversion, 323,999 shares at
conversion value (Note 1) 1,730,178 1,710,320
Preferred stock, $.001 par value - shares authorized 1,000,000; none issued
(Note 5) -0- -0-
Common stock, $.001 par value - shares authorized 20,000,000;
outstanding 1,995,000 and 1,995,000 (Notes 1 and 6) 1,671 1,671
Additional paid-in capital 6,954,679 6,954,679
Retained earnings (deficit) accumulated during the development stage 71,521 58,272
---------- ----------
$8,946,537 $8,935,487
========== ==========
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.
<PAGE>
RESTRUCTURING ACQUISITION CORPORATION
(a corporation in the development stage)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Period
May 14, 1993
Period ended Year ended (date of inception) to
March 31, 1996 December 31, 1995 March 31, 1996
-------------- ----------------- --------------
Income:
<S> <C> <C> <C>
Interest income $ 101,930 $ 470,171 $ 817,698
--------- --------- ---------
Expenses:
Investment banking fees -0- -0- 50,000
Office services (Note 4) 15,000 60,000 115,000
Interest and amortization (Note 3) 1,873 7,450 42,490
Insurance expense 11,250 45,000 86,250
Shareholder fees and expenses -0- 11,857 27,374
State franchise and other taxes 48,981 58,404 122,715
Professional fees 3,771 21,679 39,994
Miscellaneous expenses -0- 1,116 1,817
Travel and entertainment -0- 11,559 11,559
Total expenses 80,875 217,065 497,199
Income before taxes 21,055 253,106 320,499
Federal income tax (current) (12,052) 97,754 92,653
--------- --------- ---------
Net income $ 33,107 $ 155,352 $ 227,846
========= ========= =========
Net income per share $ .02 $ .08
========= =========
Weighted average common shares outstanding 1,995,000 1,995,000
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.
<PAGE>
RESTRUCTURING ACQUISITION CORPORATION
(a corporation in the development stage)
STATEMENTS OF COMMON STOCK, COMMON STOCK SUBJECT TO POSSIBLE CONVERSION,
PREFERRED STOCK, ADDITIONAL PAID-IN CAPITAL AND RETAINED EARNINGS (DEFICIT)
PERIOD FROM MAY 14, 1993 (DATE OF INCEPTION) TO MARCH 31, 1996
<TABLE>
<CAPTION>
Retained Earnings
(Deficit)
Common stock accumulated
subject to Additional during the
Common stock possible conversion Preferred stock paid-in-capital development stage
------------ ------------------- --------------- --------------- -----------------
No. of shares Amount No. of shares Amount No. of shares Amount Amount Amount
------------- ------ ------------- ------ ------------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, May 14, 1993 - - - - - - - -
Original issuance of
common stock 375,000 $ 375 - - - - $ 125 -
Net (loss) for the
period May 14, 1993
to December 31, 1993 - - - - - - - $ (13,828)
--------- ------ ------- ---------- ------ ----- ---------- ---------
Balance, December 31, 1993 375,000 375 - - - - 125 (13,828)
Sale of common stock in
public offering, net of
underwriting discounts
and offering expenses 1,296,001 1,296 323,999 $1,573,853 - - 6,954,554 -
Net income for the year
ended December 31, 1994 - - - - - - - 53,215
Accretion to redemption
value of common stock - - - (46,425) - - - 46,425
--------- ------ ------- ---------- ------ ----- ---------- ---------
Balance,December 31, 1994 1,671,001 $1,671 323,999 $1,620,278 - - $6,954,679 $( 7,038)
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.
<PAGE>
RESTRUCTURING ACQUISITION CORPORATION
(a corporation in the development stage)
STATEMENTS OF COMMON STOCK, COMMON STOCK SUBJECT TO POSSIBLE CONVERSION,
PREFERRED STOCK, ADDITIONAL PAID-IN CAPITAL AND RETAINED EARNINGS (DEFICIT)
PERIOD FROM MAY 14, 1993 (DATE OF INCEPTION) TO MARCH 31, 1996
<TABLE>
<CAPTION>
Retained Earnings
(Deficit)
Common stock accumulated
subject to Additional during the
Common stock possible conversion Preferred stock paid-in-capital development stage
------------ ------------------- --------------- --------------- -----------------
No. of shares Amount No. of shares Amount No. of shares Amount Amount Amount
------------- ------ ------------- ------ ------------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance forward
previous page 1,671,001 $1,671 323,999 $1,620,278 - - $6,954,679 $( 7,038)
Net income for
the year ended
December 31, 1995 - - - - - - - 155,352
Accretion to
redemption value
of common stock - - - 90,042 - - - ( 90,042)
---------- ------ -------- ---------- ---- ---- ---------- --------
Balance,December 31, 1995 1,671,001 $1,671 323,999 $1,710,320 - - $6,954,679 $ 58,272
Net income for the
period ended March
31, 1996 - - - - - - - 33,107
Accretion to
redemption value of
common stock - - - 19,858 - - - (19,858)
Balance, March 31, 1996 $1,671,001 $1,671 $323,999 $1,730,178 - - $6,954,679 $ 71,521
========== ====== ======== ========== ==== ==== ========== ========
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.
<PAGE>
RESTRUCTURING ACQUISITION CORPORATION
(a corporation in the development stage)
STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash
<TABLE>
<CAPTION>
Period
May 14, 1993
Year ended (date of
Period ended December 31, inception) to
March 31, 1996 1995 March 31, 1996
-------------- ---- --------------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net income $ 33,107 $ 155,352 $ 227,846
------------- ------------ ------------
Adjustments needed to reconcile net income to net cash used in
operating activities:
Amortization of financing costs -0- -0- 16,000
Amortization of organization costs 1,863 7,450 13,970
Accrued interest earned on U.S. Government securities ( 99,341) ( 450,431) ( 782,015)
(Decrease) increase in accrued expenses ( 22,057) 162,977 188,488
Decrease (increase) in prepaid insurance 11,250 -0- ( 3,750)
------------- ------------ ------------
Total adjustments ( 108,285) ( 280,004) ( 567,307)
------------- ------------ ------------
Net cash used in operating activities ( 75,178) ( 124,652) ( 339,461)
------------- ------------ ------------
Cash Flows From Investing Activities:
U.S. Government securities deposited in Trust Fund, May 1994 -0- -0- ( 7,873,200)
Cumulative maturities of U.S. Government Securities
deposited in Trust Fund ( 8,655,215) 46,021,682 66,686,417
Cumulative acquisitions of U.S. Government Securities
deposited in Trust Fund ( 8,655,215) (46,021,682) ( 66,686,417)
Increase in deferred merger costs ( 64,568) ( 63,601) ( 128,169)
------------ ------------ ------------
Net used in investing activities ( 64,568) ( 63,601) ( 8,001,369)
------------ ------------ ------------
Cash Flows From Financing Activities:
Proceeds from notes payable -0- -0- 150,000
Repayment of notes payable -0- -0- ( 150,000)
Decrease in accrued interest on notes payable -0- -0- -0-
Proceeds from public offering of units, net -0- -0- 8,529,703
Proceeds from sale of stock to founding stockholders -0- -0- 500
Deferring financing costs -0- -0- ( 16,000)
Organization costs -0- -0- ( 37,252)
------------- ------------ ------------
Net cash provided by financing activities -0- -0- 8,476,951
------------- ------------ ------------
Net increase (decrease) in cash and cash equivalents ( 139,746) ( 188,253) 136,121
Cash and cash equivalents, beginning of period 275,867 464,120 -0-
------------- ------------ ------------
Cash and cash equivalents, end of period $ 136,121 $ 275,867 $ 136,121
============= ============ ============
Supplementary disclosures:
Interest paid $ 10 $ -0- $ 12,520
Income taxes paid 60,000 6,951 66,951
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.
<PAGE>
RESTRUCTURING ACQUISITION CORPORATION
(a corporation in the development stage)
SUMMARY OF ACCOUNTING POLICIES
INCOME TAXES
The Company follows Statement of Financial Accounting Standards No. 109 (FAS
109), "Accounting for Income Taxes". FAS 109 is an asset and liability approach
that requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been recognized in the
Company's financial statements or tax returns. Deferred taxes have not been
material to date.
NET INCOME PER SHARE
Net income per common share is computed on the basis of the weighted average
number of common shares outstanding during the period including common stock
equivalents (unless antidilutive) which would arise from the exercise of stock
warrants.
ORGANIZATION COSTS
Organization costs are being amortized over 60 months.
CASH EQUIVALENTS AND TRUST FUND
For purposes of the statement of cash flows, the company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents.
U.S. Government securities deposited in Trust Fund represents a U.S. treasury
bill purchased on March 28, 1996 and maturing on May 2, 1996. The cost of this
security was $8,655,215.
INVESTMENTS
The Company adopted Statement of Financial Accounting Standards No. 115 (FAS
115), "Accounting for Certain Investments in Debt and Equity Securities",
effective January 1, 1994, with no material impact on the Company's financial
position.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
<PAGE>
RESTRUCTURING ACQUISITION CORPORATION
(a corporation in the development stage)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND BUSINESS OPERATIONS
Restructuring Acquisition Corporation ("Company") was incorporated in
Delaware on May 14, 1993 with the objective of acquiring an operating business
which requires a restructuring of its balance sheet. The Company's founding
directors and advisors purchased 500,000 common shares, $.001 par value, for
$500 during the month after incorporation. On February 28, 1994, 125,000 shares
were returned to the Company by the founding stockholders. This reduced the
common stock outstanding to 375,000 shares and adjusted the founding
stockholders' percentage ownership to 20% of the common stock expected to be
outstanding after the Offering which is discussed in Note 2. This return of
shares has been retroactively reflected in the financial statements. The Company
has selected December 31 as its fiscal year end.
The Company consummated the Offering in May, 1994 and raised net
proceeds of $8,530,000 (Note 2). The Company's management has broad discretion
with respect to the specific application of the net proceeds of the Offering,
although substantially all of the net proceeds of the Offering are intended to
be generally applied toward consummating a business combination with an
operating business which requires a restructuring of its balance sheet
("Business Combination"). Furthermore, there is no assurance that the Company
will be able to successfully effect a Business Combination. Upon the closing of
the Offering, $7,873,200 was deposited in an interest-bearing trust account
("Trust Fund") to be held until the earlier of (i) the consummation of a
Business Combination or (ii) liquidation of the Company. The Trust Fund
indenture limits investments to U.S. Government securities with a maturity of
180 days or less. The remaining proceeds will be used to pay for business, legal
and accounting due diligence on prospective acquisitions, and continuing general
and administrative expenses in addition to other expenses.
The Company, after signing a definitive agreement for the acquisition
of a target business, will submit such transaction for stockholder approval. In
the event that 20% or more of the stockholders excluding, for this purpose,
those persons who were stockholders prior to the Offering, vote against the
Business Combination, the Business Combination will not be consummated. All of
the Company's stockholders prior to the Offering, including all of the officers,
directors and advisors of the Company ("Initial Stockholders") have agreed to
vote their shares of common stock in accordance with the vote of the majority in
interest of all other stockholders of the Company ("Public Stockholders") with
respect to any Business Combination. After consummation of the Company's first
Business Combination, all of these voting safeguards will no longer be
applicable.
<PAGE>
RESTRUCTURING ACQUISITION CORPORATION
(a corporation in the development stage)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND BUSINESS OPERATIONS (CONT'D)
With respect to the first Business Combination which is approved and
consummated, any Public Stockholder who voted against the Business Combination
may demand that the Company convert his shares. The per share conversion price
will equal the amount in the Trust Fund as of the record date for determination
of stockholders entitled to vote on the Business Combination divided by the
number of shares held by Public Stockholders. The Company will not consummate a
Business Combination if 20% or more in interest of the Public Stockholders
exercise their conversion rights. Accordingly, Public Stockholders holding
19.99% of the aggregate number of shares owned by all Public Stockholders may
have their shares converted in the event of a Business Combination. Such Public
Stockholders are entitled to receive their per share interest in the Trust Fund
computed without regard to shares held by Initial Stockholders. Accordingly,
19.99% of the net proceeds from the Offering has been classified as common stock
subject to possible conversion in the accompanying balance sheet at the
conversion value.
The Company's Certificate of Incorporation provides for mandatory
liquidation of the Company, without stockholder approval, in the event that the
Company does not consummate a Business Combination within 24 months from the
consummation of the Offering (May 1996). In the event of liquidation, it is
likely that the per share value of the residual assets remaining available for
distribution (including Trust Fund assets) will be less than the initial public
offering price per share in the Offering (assuming no value is attributed to the
Warrants contained in the Units offered in the Offering discussed in Note 2).
See Note 7 regarding status of proposed merger.
(2) PUBLIC OFFERING
On May 12, 1994 and May 27, 1994, the Company sold 1,500,000 and
120,000 units ("Units") respectively in its initial public offering
("Offering"). Each Unit consists of one share of the Company's common stock,
$.001 par value, and two Redeemable Common Stock Purchase Warrants ("Warrants").
Each Warrant entitles the holder to purchase from the Company one share of
common stock at an exercise price of $5.00 for a period of six years commencing
one year from the effective date of the Offering. The Warrants will be
redeemable at a price of $.01 per Warrant upon 30 days notice at any time, only
in the event that the last sale price of the common stock is at least $8.50 per
share for 20 consecutive trading days ending on the third day prior to date on
which notice of redemption is given.
<PAGE>
RESTRUCTURING ACQUISITION CORPORATION
(a corporation in the development stage)
NOTES TO FINANCIAL STATEMENTS
(3) NOTES PAYABLE
During 1993 the Company issued an aggregate of $150,000 of promissory
notes to certain accredited investors. These notes bore interest at the rate of
10% per annum and were repaid on the consummation of the Offering with accrued
interest thereon of $12,510. In addition, the investors were issued 300,000
warrants (valued at a nominal amount) which are identical to the Warrants
discussed in Note 2, except that they are not redeemable by the Company until 90
days after the consummation of a Business Combination.
(4) COMMITMENTS
The Company presently occupies office space provided by a related
company owned by certain stockholders. Such related company has agreed that,
until the acquisition of a target business by the Company, it will make such
office space, as well as certain office and secretarial services, available to
the Company, as may be required by the Company from time to time. The Company
has been paying such related company $5,000 per month for such services
commencing on the effective date of the Offering.
(5) PREFERRED STOCK
The Company is authorized to issue 1,000,000 shares of preferred stock
with such designations, voting and other rights and preferences as may be
determined from time to time by the Board of Directors.
(6) COMMON STOCK
At March 31, 1996, 3,840,000 shares were reserved for issuance upon
exercise of redeemable warrants and underwriters' warrants.
(7) PROPOSED MERGER
On September 18, 1995, the Company announced a proposed merger
agreement with Media Technology Limited, an Australian Company (Media Tech).
Media Tech is a developing company in the business of point to multi-point data
broadcast through the use of the vertical blanking interval (the "VBI") that
composes a part of all television signals. As of November 3, 1995, the Company &
Media Tech entered into an Amended and Restated Implementation Agreement and
Plan of Merger and Acquisition (the Implementation Agreement), whereby the
Company's stockholders would ultimately retain a minority interest in Media Tech
RAC, Inc. a newly formed Delaware corporation and a wholly owned subsidiary of
Media Tech. The merger is subject to, among other things, the approval of 80% of
the Company's stockholders. Costs relating to this merger, primarily
professional fees, aggregated $128,169 as of March 31, 1996 and have been
deferred.
On May 10, 1996 the shareholders voted against the proposed merger with
Media Tech. As a result, the Company will be required to liquidate as discussed
in Note 1.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
RESTRUCTURING ACQUISITION CORPORATION
Proxy -- Special Meeting of Stockholders
June 21, 1996
The undersigned, a stockholder of Restructuring Acquisition
Corporation, a Delaware corporation (the "Company"), does hereby appoint Steven
M. Mizel and Steven Wolosky as the true and lawful attorneys and proxies with
full power of substitution, for and in the name, place and stead of the
undersigned, to vote all of the shares of Common Stock, $.001 par value (the
"Common Stock") of the Company which the undersigned would be entitled to vote
if personally present at the Special Meeting of Stockholders of the Company (the
"Special Meeting"), to be held at the offices of Olshan Grundman Frome &
Rosenzweig LLP, 505 Park Avenue, New York, New York 10022 on June 21, 1996 at
10:00 a.m., local time.
The undersigned hereby instructs said proxies or their
substitutes:
1. DISSOLUTION:
To approve and adopt the Plan of Dissolution, Complete
Liquidation and Termination of Existence of the Company.
______ FOR _____ AGAINST _____ ABSTAIN
2. DISCRETIONARY AUTHORITY: To vote with discretionary authority
with respect to all other matters which may come before the
Special Meeting.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREINBEFORE
GIVEN. UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO APPROVE THE PLAN
OF DISSOLUTION, COMPLETE LIQUIDATION AND TERMINATION OF EXISTENCE AND IN
ACCORDANCE WITH THE DISCRETION OF THE PROXIES OR PROXY WITH RESPECT TO ANY OTHER
BUSINESS TRANSACTED AT THE SPECIAL MEETING.
<PAGE>
The undersigned hereby revokes any proxy or proxies heretofore given
and ratifies and confirms that all the proxies appointed hereby, or any of them,
or their substitutes, may lawfully do or cause to be done by virtue hereof. The
undersigned hereby acknowledges receipt of a copy of the Notice of Special
Meeting and the Proxy Statement dated June 10, 1996.
Dated _______________________ 1996
_____________________________ (L.S.)
_____________________________ (L.S.)
Signature(s)
NOTE: Your signature should appear the same as
your name appears hereon. In signing as attorney,
executor, administrator, trustee or guardian,
please indicate the capacity in which signing.
When signing as joint tenants, all parties in the
joint tenancy must sign. When a proxy is given by
a corporation, it should be signed by an
authorized officer and the corporate seal affixed.
No postage is required if mailed in the United
States.
(ii)
<PAGE>
ANNEX A
PLAN OF DISSOLUTION,
COMPLETE LIQUIDATION
AND TERMINATION OF
EXISTENCE
OF
RESTRUCTURING ACQUISITION CORPORATION
The following Plan of Dissolution, Complete Liquidation and
Termination of Existence (the "Plan") of Restructuring Acquisition Corporation,
a Delaware corporation (the "Corporation") shall be effective only upon the
adoption and approval of the Plan, either at a special meeting of stockholders
or by the written consent of stockholders, by the affirmative vote of a majority
of the outstanding common stock of the Corporation. The day of such adoption and
approval by the stockholders is hereinafter called the Effective Date.
1. DISSOLUTION. As promptly as practicable after the Effective
Date of the Plan, the Corporation shall be dissolved in accordance with the laws
of the State of Delaware.
2. CESSATION OF BUSINESS. After the Effective Date, the
Corporation shall not engage in any business activities except for the purposes
of preserving the values of its assets, adjusting and winding up its business
and affairs, and distributing its assets in accordance with the Plan. The Board
of Directors now in office and, at their pleasure, the officers, shall continue
in office solely for these purposes.
3. PAYMENT OF DEBTS. All known or ascertainable liabilities of the
Corporation shall be promptly paid or provided for.
<PAGE>
4. RESTRICTIONS ON TRANSFER OF SHARES. The proportionate interests
of stockholders in the assets of the Corporation shall be fixed on the basis of
their respective stockholdings at the close of business on the Effective Date of
the Plan. At such time the books of the Corporation shall be closed. Thereafter,
unless the books are reopened because the Plan cannot be carried into effect
under the laws of the State of Delaware, or otherwise, the stockholders'
respective interests in the assets shall not be transferable by the negotiation
of stock certificates.
5. LIQUIDATION OF ASSETS. The Corporation will distribute to all
Stockholders who acquired their stock in the Corporation on or after May 4, 1994
(the "Public Stockholders"), in proportion to their respective equity interests
in the Corporation, an aggregate sum equal to the amount in the trust fund
established with 90% of the net proceeds from the Corporation's Initial Public
Offering (the "Trust Fund"), inclusive of interest plus any remaining net assets
of the Corporation, in accordance with Paragraphs 6 and 7 hereof. As of June 1,
1996 such net amount in the Trust Fund was approximately $8,728,865 or $5.39 per
share of Common Stock held by the Public Stockholders.
6. RIGHT TO LIQUIDATING DISTRIBUTION. As soon as possible after
the Effective Date of the Plan, the Company will establish a date for the
purpose of determining Public Stockholders entitled to liquidating distributions
(the "Final Record Date"). Public Stockholders as of the Final Record Date shall
be given notice to deliver to the Board of Directors of the Corporation or its
designated agent, the certificate representing all of the Corporation's common
stock owned by the Public Stockholder as of
-2-
<PAGE>
the close of business on the Effective Date of the Plan. Such delivery of the
certificate shall be made for the purpose of notation thereon of the
distribution of the Corporation's assets and the certificates will be returned
to the Public Stockholder together with the assets distributable to the Public
Stockholder in accordance with Paragraph 7 hereof.
7. DISTRIBUTION. All assets distributable to the Public
Stockholders will be distributed by the Corporation or its designated agent as
soon as practicable following the Effective Date to the Public Stockholders of
Record on the Final Record Date who have delivered their certificate
representing common stock of the Corporation as provided in Paragraph 6 hereof.
No interest shall accrue at any time on any cash held for distribution.
8. POWER OF BOARD OF DIRECTORS. The Board of Directors and, if
authorized by the Board of Directors, the officers, shall have authority to do
or authorize any and all acts and things as provided for in the Plan and any and
all such further acts and things as they may consider desirable to carry out the
purposes of the Plan, including the execution and filing of all such
certificates, documents, information returns, tax returns, and other documents
which may be necessary or appropriate to implement the Plan. The Board of
Directors may authorize such variations from or amendments to the provisions of
the Plan as may be necessary or appropriate to effectuate the dissolution,
complete liquidation, and termination of existence of the Corporation, and the
distribution of its assets to its stockholders in accordance with the laws of
the State of Delaware. The death, resignation, or other disability of any
director or officer of the Corporation
-3-
<PAGE>
shall not impair the authority of the surviving or remaining director or officer
to exercise any of the powers provided for in the Plan. Upon such death,
resignation, or other disability, the surviving or remaining directors, or if
there are none, the remaining officer shall have authority to fill the vacancy
or vacancies so created, but the failure to fill such vacancy or vacancies shall
not impair the authority of the surviving or remaining director or officer to
exercise any of the powers provided for in the Plan.
-4-
