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Restructuring Acquisition Corp – ‘PRES14C’ for 5/31/96

As of:  Friday, 5/24/96   ·   For:  5/31/96   ·   Accession #:  921895-96-178   ·   File #:  0-23740

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 5/24/96  Restructuring Acquisition Corp    PRES14C     5/31/96    1:39K                                    Olshan Frome Wolosky LLP

Preliminary Proxy Information Statement — Special Meeting   —   Schedule 14C
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRES14C     Information Statement                                 17     64K 

Document Table of Contents

Page (sequential) | (alphabetic) Top
11st Page   -   Filing Submission
6Stockholders' Continuing Liability
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RESTRUCTURING ACQUISITION CORPORATION 555 MADISON AVENUE NEW YORK, NEW YORK 10022 INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND RULE 14C-2 THEREUNDER. ------------------------------------ ------------------------------------ This Information Statement is being mailed on or about May __, 1996 to the holders (the "Stockholders") of the Common Stock, $.001 par value per share ("Common Stock"), of Restructuring Acquisition Corporation., a Delaware corporation ("RAC" or the "Company"), in connection with the approval of 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. As of May 31, 1996 of the [1,995,000] shares of Common Stock outstanding, [____________] (or ___%) delivered written consents to the Company approving the Plan of Dissolution. Since the Plan of Dissolution has been approved by the holders of the required majority of the Common Stock, no proxies are being solicited with this Information Statement. The Company has asked brokers and other custodians, nominees and fiduciaries to forward this Information Statement to the beneficial owners of the shares held of record by such persons and will reimburse out-of-pocket expenses incurred in forwarding such material. The Board of Directors has fixed the close of business on May 31, 1996 as the record date for the determination of Stockholders who are entitled to receive this Information Statement. This Information Statement is required by Section 14(c) of the Securities Exchange Act of 1934, as amended, and Rule 14c-2 promulgated thereunder. You are urged to read this Information Statement carefully. You are not, however, required to take any action. NO VOTE OR OTHER ACTION OF THE COMPANY'S STOCKHOLDERS IS REQUIRED IN CONNECTION WITH THIS INFORMATION STATEMENT. NO PROXIES ARE BEING SOLICITED AND YOU ARE REQUESTED NOT TO SEND THE COMPANY A PROXY.
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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 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 "BAC Certificate") and would distribute to all of its Public Stockholders, in proportion to their ownership of RAC Common Stock, an amount equal to the amount in the Trust Fund (as defined below). 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 Company's certificate of incorporation (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 initial public offering ("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 RAC, an aggregate sum equal to approximately [$ ]. Since the Company was unable to consummate a Business Combination by May 12, 1996, the RAC Board of Directors adopted a -1-
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resolution to dissolve the Company in accordance with the RAC Certificate. In addition, in reaching its conclusion to liquidate, the Board of Directors considered a number of other factors, including 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 participate in any liquidation distribution. Therefore, at May 31, 1996, upon liquidation, the Public Stockholders will receive approximately $[__________________] or $[____] 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 was necessary to approve the Plan of Dissolution. The written consent by a majority of stockholders is permitted as a substitute for a meeting of stockholders. As of May __, 1996, the Company obtained the written consent of _________ shares, representing ___% of the outstanding shares at such date. Accordingly, the Plan of Dissolution has been duly adopted by the RAC Stockholders. 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"). Prior to making any distributions to stockholders, the Company is required to pay, or make reasonable provision to pay, all claims and obligations of the Company, including contingent, conditional and unmatured claims known to the Company. Following the payment or the provision for the payment of the Company's claims and obligations, the Plan provides for the pro rata distribution of the Company's remaining property and assets to the stockholders of the Company. The Plan provides that the timing and amount of any distributions will be determined by the Board of Directors in its discretion and that the remaining property and assets of the Company may be distributed all at once or in a series of distributions. As of the date of this Information Statement, the Company is not aware of any material claims, obligations or other liabilities to which it is subject. The Company does not plan to satisfy all of its liabilities and obligations prior to making distributions to stockholders. Instead, the Company will establish a contingency reserve in an amount which the Board of Directors reasonably determines will be adequate to satisfy any contingent obligations of the Company in connection with its -2-
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pending litigation matters and any other liabilities or obligations of the Company. The Board of Directors estimates that the amount of the contingency reserve will be _________ (consisting of cash). Following the liquidating distribution, the Company's assets will consist of the cash and other assets, if any, retained in the contingency reserve. Any amounts in the contingency reserve which are not applied to satisfy claims, obligations or expenses of the Company ultimately will be distributed to stockholders. The Board of Directors does not believe that there will be sufficient funds to cover any such distributions. The Company intends to establish the contingency reserve in an amount sufficient to provide for all obligations and liabilities of the Company, including contingent obligations. However, there can be no assurance that the contingency reserve will be sufficient to satisfy all such obligations and liabilities. If the amount of the reserve is not sufficient, stockholders may be required to return all or a portion of the liquidating distributions made to them. 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 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. However, if the Board of Directors determines that any amendment or modification would materially and adversely affect the interests of stockholders, the Board of Directors will submit the amendment or modification to the stockholders for their approval. -3-
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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 Plan authorizes the Board of Directors to appoint one or more individuals or corporate persons to act as the trustee or trustees of the trust and to cause the Company to enter into a liquidating trust agreement with the trustee or trustees on such terms and conditions a may be approved by the Board of Directors. Adoption of the Plan by the stockholders also will constitute approval by the stockholders of any such appointment and liquidating trust agreement. 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 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 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 -4-
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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. The Plan authorizes the Board of Directors to obtain and maintain such insurance as may be necessary to cover the Company's indemnification obligations. 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 initial liquidating distribution and such other liquidating distributions as thereafter may be made by the Company. 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. STOCKHOLDERS' CONTINUING LIABILITY The Plan contemplates that liquidating distributions will be made to stockholders only to the extent of distributable -5-
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assets over a reserve for the obligations and liabilities of the Company. However, 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. In order to avoid any such liability on the part of stockholders, the Company intends to establish a contingency reserve that will adequately provide for the payment of all liabilities and obligations of the Company. However, it is possible that the Company may not anticipate all possible liabilities and that, if the amount of such liabilities exceeds the contingency reserve, the stockholders of the Company may have to return all or a portion of the liquidating distributions made to them. 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. 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. -6-
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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 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 -7-
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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 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 -8-
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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. -9-
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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 $8,530,000 after payment of offering expenses and repayment of the Bridge Financing promissory notes and interest. RAC's management has broad discretion with respect to the specific application of the net proceeds of the offering, although substantially all of the net proceeds are intended to be generally applied toward consummating a Business Combination with an operating business which requires a restructuring of its balance sheet to expand or continue its operations. A majority of the net proceeds of [$___________] are held 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 are being 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." -10-
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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. [Enlarge/Download Table] 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% ----------------- (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. -11-
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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 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 has agreed to pay Walker Street $5,000 per month for such services, commencing on the date of this Prospectus. 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 is on terms at least as favorable as would be available from an unaffiliated third party. Other than the $5,000 per month administrative fee payable 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. 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 Investors, Inc. ("Walker Street"), which provides general financial advisory services. From 1988 until 1990, he was President, Chairman of the Board and Chief Executive Officer of 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 -12-
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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 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. -13-
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Restructuring Acquisition Corporation Proforma Liquidating Balance Sheet December 31, 1995 (Unaudited) ASSETS US Government securities deposited in trust funds and accrued interest thereon 8,555,874 ========= LIABILITIES AND STOCKHOLDERS' EQUITY Liquidating distribution to stockholders 8,555,874(1) =========== Number of Common Shares outstanding 1,620,000(2) =========== Liquidating value per share at December 31, 1995 $ 5.28 ========= (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 on hand at December 31, 1995 which are expected to be used to settle current and future liabilities of the company. (2) Includes only those shares issued in the public offering. -14-
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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 May 31, 1996)........................................... On May __, 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 $[4 3/4] and $[4], respectively. Stockholders are urged to obtain current market quotations. -15-
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PROPERTIES Walker Street Investors, Inc. (the "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 pays Walker Street a fee of $5,000 per month for such services. LEGAL MATTERS The Company is not a party to any legal proceeding. EXPERTS The financial statements of RAC as of December 31, 1995 and 1994 and for each of the periods then ended included herein have been audited by BDO Seidman LLP, independent public accountants, as indicated in their report with respect thereto and are incorporated herein in reliance upon the authority of said firm as experts in accounting and auditing. 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. -16-

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For Period End:5/31/96116
Filed on:5/24/96
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