SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
13E-3
RULE
13e-3 TRANSACTION STATEMENT UNDER
SECTION
13(e) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT
NO. 2)
Northway
Financial, Inc.
(Name
of
Issuer)
Northway
Financial, Inc.
(Name
of
Person(s) Filing Statement)
Common
Stock, Par Value $1.00 Per Share
(Title
of
Class of Securities)
667270102
(CUSIP
Number of Class of Securities)
Richard
P. Orsillo
Northway
Financial, Inc.
9
Main
Street
Berlin,
New Hampshire 03570
(603)
752-1171
(Name,
Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of Persons Filing Statement)
With
a
copy to:
William
P. Mayer
Goodwin
Procter LLP
One
Exchange Place
Boston,
MA 02109
(617)
570-1534
This
statement is filed in connection with (check the appropriate box):
a.
|X|
The
filing of solicitation materials or an information statement subject to
Regulation 14A, Regulation 14C, or Rule 13e-3(c) under the Securities Exchange
Act
of 1934
(the
“Act”).
|
b.
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|_|
The filing of a registration statement under the Securities Act of
1933.
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|
c.
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|_|
A tender offer.
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d.
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|_|
None of the above.
|
Check
the
following box if the soliciting materials or information statement referred
to
in checking box (a) are preliminary copies. |X|
Check
the
following box if the filing is a final amendment reporting the results of the
transaction: |_|
CALCULATION
OF FILING FEE
|
Transaction
Valuation(*)
Amount of Filing Fee**
------------------------
----------------------
$4,889,000
$977.80
|
*Estimated
maximum price to be paid in lieu of issuance of fractional shares of common
stock to persons who would hold less than one whole share of common stock of
record after the proposed reverse stock split and based on an amount per share
equal to the product obtained by multiplying (A) $37.50 by (B) the total number
of shares of common stock owned by all such stockholders of record immediately
prior to the reverse stock split.
**Determined
pursuant to Rule 0-11(b)(1) as $4,889,000 multiplied by .0002.
|x|
Check
Box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify
the filing with which the offsetting fee was previously paid. Identify the
previous filing by registration statement number, or the Form or Schedule and
the date of its filing.
(1) Amount
previsously paid: $911.80
(2) Form
or Registration No.: Schedule 13E-3
(3) Filing
Party: Northway Financial, Inc.
INTRODUCTION
Northway
Financial, Inc. a New Hampshire Corporation (“Northway") is proposing that
Northway's stockholders adopt amendments to the amended and restated articles
of
incorporation of Northway that will result in a reverse/forward stock split
transaction. If the split transaction is completed our stockholders of record
who hold only fractional shares after giving effect to the 1-for-400 reverse
stock split will receive a payment of $37.50 per share for each pre-split share.
If the split transaction is completed, stockholders of record with fewer than
400 shares prior to the reverse stock split will have no interest in Northway
and will become entitled only to a cash payment for their shares. Based upon
an
analysis of the stockholder base as of March 28, 2007, Northway expected to
pay
approximately $4,889,000 to its stockholders in the aggregate in the reverse
stock split. Based
upon recent trading activity, Northway believes that the amount payable to
non-continuing stockholders will change, and the cost of the transaction could
increase significantly as a result of further trading activity in Northway’s
shares between the date hereof and the effective date of the split
transaction.After Northway completes the reverse stock split and
identifies those stockholders entitled to payment for their pre-split shares,
it
will complete a forward stock split in which each share of common stock will
be
converted into 800 shares of common stock post-split. As a result, stockholders
of record who hold 400 or more shares prior to the split transaction will
ultimately hold twice the number of shares following the split transaction.
The
effect of the split transaction will be to reduce the number of stockholders
of
record to less than 300, which will allow Northway to suspend its reporting
obligations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
This
Rule
13e-3 Transaction Statement on Schedule 13E-3 is being filed by Northway
pursuant to Section 13(e) of the Exchange Act and Rule 13e-3
thereunder.
This
Schedule 13E-3 is being filed with the Securities and Exchange Commission and
includes a preliminary proxy statement filed by Northway pursuant to Regulation
14A under the Securities Exchange Act of 1934, as amended, pursuant to which
the
holders of the common stock of Northway will be given notice of the annual
meeting at which they will be asked to approve the reverse and forward stock
splits, and to transact any other business properly brought before the annual
meeting.
The
information contained in the proxy statement is hereby expressly incorporated
herein by reference and the responses to each item are qualified in their
entirety by reference to the information contained in the proxy statement.
As of
the date hereof, the proxy statement is in preliminary form and is subject
to
completion or amendment. This Schedule 13E-3 will be further amended to reflect
such completion or amendment of the proxy statement.
All
parenthetical references under the various Items contained in this Schedule
13E-3 are references to the corresponding Items contained in Regulation M-A
under the Exchange Act.
TRANSACTION
STATEMENT
ITEM
1. Summary Term Sheet.
(Reg.
M-A
1001)
The
information set forth in the proxy statement under the caption "SUMMARY TERM
SHEET" is hereby incorporated by reference.
ITEM
2. Subject Company Information.
(Reg.
M-A
1002)
(a)
The
information set forth in the proxy statement under the caption "SUMMARY TERM
SHEET" is hereby incorporated herein by reference.
(b)
The
information set forth in the proxy statement under the caption "ABOUT THE ANNUAL
MEETING--Record Date; Voting Power" is hereby incorporated herein by
reference.
(c)
The
information set forth in the proxy statement under the caption "MARKET PRICE
OF
NORTHWAY FINANCIAL, INC. COMMON STOCK AND DIVIDEND INFORMATION" is hereby
incorporated herein by reference.
(d)
The
information set forth in the proxy statement under the caption "MARKET PRICE
OF
NORTHWAY FINANCIAL, INC. COMMON STOCK AND DIVIDEND INFORMATION" is hereby
incorporated herein by reference.
(e)
Not
applicable.
(f)
The
information set forth in the proxy statement under the caption "COMMON STOCK
PURCHASE INFORMATION" is hereby incorporated herein by reference.
ITEM
3. Identity and Background of Filing Person.
(Reg.
M-A
1003(a) through (c))
(a)-(c)
The information set forth in the proxy statement under the caption "SUMMARY
TERM
SHEET" is hereby incorporated herein by reference.
The
(i)
name, (ii) current principal occupation or employment, and the name and
principal business of any corporation or other organization in which the
employment or occupation is conducted, and (iii) material occupations,
positions, offices or employment during the past five years, of each of the
Directors of Northway is incorporated by reference to "Election of Directors
of
Northway-Information Concerning Directors and Nominees" in the proxy statement.
Each such person is a United States citizen. Unless otherwise noted, the
principal address of each person identified in that section of the proxy
statement is 9 Main Street, Berlin, New Hampshire 03570.
The
principal business addresses of the businesses for whom such Directors have
worked during the last 5 years, other than those Directors employed by the
Company, are as follows:
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Directors
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Business
Address of Employer
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|
Fletcher
W. Adams
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Retired
|
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John
H. Noyes
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Noyes
Insurance Agency
|
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63
Main Street
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Plymouth
NH 03264
|
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Barry
J. Kelley
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White
Mountain Lumber Co.
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30
East Milan Road
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Berlin
NH 03570
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Randall
G. Labnon
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Town
and Country Motor Inn
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Route
2
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Shelburne
NH 03581
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Frederick
C. Anderson
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NH
Electric Cooperative, Inc.
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579
Tenney Mountain Highway
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Plymouth
NH 03264
|
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Arnold
P. Hanson, Jr.
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Isaacson
Structural Steel, Inc.
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Jericho
Road
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Berlin
NH 03570
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Stephen
G. Boucher
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Airmar
Technology Corp.
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35
Meadowbrook Drive
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Milford
NH 03055
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Brien
L. Ward, Esq
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Brien
L. Ward, Esquire
|
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74
Cottage Street
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Littleton
NH 03561
|
Information,
including business experience, concerning the Executive Officers of the Company
and Northway Bank who are not also Directors of the Company is incorporated
by
reference to “Election of Directors of Northway-Executive Officers” in the proxy
statement. Each of such Executive Officers is a United States citizen. Their
principal business address is 9 Main Street, Berlin, New Hampshire,
03570.
Neither
Northway, Northway Bank, nor, to our knowledge, any of the Directors or
Executive Officers has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or has been a party to any judicial
or administrative proceeding (except for matters that were dismissed without
sanction or settlement) that resulted in a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to, federal
or
state securities laws, or a finding of any violation of federal or state
securities laws.
ITEM
4. Terms of Transaction.
(Reg.
M-A
1004(a) and (c) through (f))
(a)
The
information set forth in the proxy statement under the captions "SUMMARY TERM
SHEET," "THE SPLIT TRANSACTION—SPECIAL FACTORS--Overview of the Split
Transaction," "--Background of the Split Transaction," "--Reasons for the Split
Transaction," "--Fairness of the Split Transaction; "--Board Recommendation,"
"--Effect of the Split Transaction on Affiliates," "--Determination of Fairness
of Split Transaction By Affiliates," "--Effects of the Split Transaction on
Northway," "--Accounting Treatment," "--Federal Income Tax Consequences" and
"ABOUT THE ANNUAL MEETING-- Vote Required for Approval" is hereby incorporated
herein by reference.
(b)
Securities held by directors, officers or affiliates holdling fewer than 400
shares will be repurchased pursuant to the transaction upon the same terms
as
all other shareholders holding fewer than 400 shares.
(c)
The
information set forth in the proxy statement under the caption "THE SPLIT
TRANSACTION--SPECIAL FACTORS--Fairness of the Split Transaction," "--Structure
of the Split Transaction," and "--Effect of the Split Transaction on Affiliates
as Stockholders."
(d)
The
information set forth in the proxy statement under the caption "THE SPLIT
TRANSACTION--SPECIAL FACTORS--Appraisal Rights and Dissenters' Rights" is hereby
incorporated herein by reference.
(e)
The
information set forth in the proxy statement under the caption "THE SPLIT
TRANSACTION--SPECIAL FACTORS--Fairness of the Split Transaction - Procedural
Fairness" is hereby incorporated herein by reference.
(f)
Not
applicable.
ITEM
5. Past Contacts, Transaction, Negotiations and
Agreements.
(Reg.
M-A
1005(a) through (c) and (e)
(a)
The
information set forth in the proxy statement under the caption "ELECTION OF
DIRECTORS OF NORTHWAY--Certain Relationships and Related Transactions," is
hereby incorporated herein by reference.
(c)
The
information set forth in the proxy statement under the caption "THE SPLIT
TRANSACTION--SPECIAL FACTORS--Background of the Split Transaction" is hereby
incorporated herein by reference.
(e)
Certain of the Directors and Executive Officers hold stock options for shares
of
the Company's common stock. Information concerning these stock options is
incorporated by reference to "ELECTION OF DIRECTORS OF NORTHWAY—Security
Ownership of Management and Principal Stockholders" in the proxy
statement.
ITEM
6. Purposes of the Transaction and Plans or Proposals.
(Reg.
M-A
1006(b) and (c)(1)-(8))
(b)
The
fractional shares acquired in the reverse stock split will be retired and
returned to the status of authorized but unissued shares of Company Common
Stock.
(c)
(1)-(8) The information set forth in the proxy statement under the captions
"THE
SPLIT TRANSACTION--SPECIAL FACTORS--Background of the Split Transaction" and
"--Effects of the Split Transaction on Northway."
ITEM
7. Purposes, Alternatives, Reasons and Effects.
(Reg.
M-A
1013)
(a)-(c)
The information set forth in the proxy statement under the captions "THE SPLIT
TRANSACTION--SPECIAL FACTORS--Background of the Split Transaction," "--Reasons
for the Split Transaction," "--Fairness of the Split Transaction," "--Board
Recommendation," "--Structure of the Split Transaction" is hereby incorporated
herein by reference.
(d)
The
information set forth in the proxy statement under the captions "THE SPLIT
TRANSACTION--Effects of the Split Transaction on Northway," "--Fairness of
the
Split Transaction," "--Effect of the Split Transaction on Affiliates," and
"--Material Federal Income Tax Consequences" is hereby incorporated herein
by
reference. The Split Transaction will have no effect on Northway
Bank.
ITEM
8. Fairness of the Transaction.
(Reg.
M-A
1014)
(a)-(b)
The information set forth in the proxy statement under the captions "THE SPLIT
TRANSACTION--Background of the Split Transaction," --Reasons for the Split
Transaction," "--Fairness of the Split Transaction," "--Board Recommendation,"
"--Determination of Fairness of Split Transaction by Affiliates," and
"--Fairness Opinion of Financial Advisor" is hereby incorporated herein by
reference.
(c)
The
information set forth in the proxy statement under the captions "THE SPLIT
TRANSACTION--SPECIAL FACTORS--Background of the Split Transaction," and
"--Fairness of the Split Transaction" is hereby incorporated herein by
reference.
(d)-(f)
The information set forth in the proxy statement under the captions "THE SPLIT
TRANSACTION--SPECIAL FACTORS--Background of the Split Transaction" is hereby
incorporated herein by reference.
ITEM
9. Reports, Opinions, Appraisals and Negotiations.
(Reg.
M-A
1015)
(a)-(c)
The information set forth in the proxy statement under the captions "THE SPLIT
TRANSACTION--SPECIAL FACTORS--Fairness Opinion of Financial Advisor" is hereby
incorporated herein by reference.
Appendix
B to the proxy statement is hereby incorporated in its entirety herein by
reference.
Exhibits
|
Ex
99.1
|
Northeast
Capital August 2, 2006 Presentation entitled "Cost-Benefit
Analysis -
Reverse Stock Split"
|
|
Ex
99.2
|
Northeast
Capital September 18, 2006 Presentation entitled "Typical Community
Bank
Shareholder Profile"
|
|
Ex
99.3
|
Northeast
Capital October 5, 2006 Summary of Key Findings
|
|
Ex
99.4
|
Northeast
Capital October 9, 2006 Presentation entitled "The Advantages
and
Disadvantages of Going Private"
|
|
Ex
99.5
|
Northeast
Capital December 19, 2006 Discussion Agenda
|
|
Ex
99.6
|
Northeast
Capital March 15, 2007 Worksheet entitled "Transactions over Last Two
Years"
|
|
Ex
99.7
|
Northeast
Capital January 22,2007 "Impact of a Reverse Split" 125
shares
|
|
Ex
99.8
|
Northeast
Capital January 30, 2007 Presentation entitled "Enhancing Shareholder
Value Through a Reverse Stock Split"
|
|
Ex
99.9
|
Northeast
Capital February 26, 2007 "Potential Impact of a Reverse Split"
350
shares
|
|
Ex
99.10
|
Northeast
Capital March 5, 2007 "Potential Impact of a Reverse Split"
350 shares
revised
|
|
Ex
99.11
|
Northeast
Capital April 9, 2007 Presentation entitled "The Potential
Impact of a
Going Private Reverse Stock Split"
|
|
Ex
99.12
|
Northeast
Capital April 10, 2007 "Potential Impact of a Reverse Split" 400
shares
|
|
Ex
99.13
|
Northeast
Capital June 21, 2006 Presentation entitled “Investor Relations
Analysis”
|
|
Ex
99.14
|
Northeast
Capital August 4, 2006 Presentation entitled “Top 50 Bottom 100
Shareholders”
|
ITEM
10. Source and Amount of Funds or Other Consideration.
(Reg.
M-A
1007)
(a)
The
information set forth in the proxy statement under the captions "THE SPLIT
TRANSACTION--SPECIAL FACTORS--Financing of the Split Transaction" is hereby
incorporated herein by reference.
(b)
Not
applicable.
(c)
The
information set forth in the proxy statement under the caption "THE SPLIT
TRANSACTION--SPECIAL FACTORS--Fees and Expenses" is hereby incorporated herein
by reference.
(d)
Not
applicable.
ITEM
11. Interest in Securities of the Subject Company.
(Reg.
M-A
1008)
(a)
The
information set forth in the proxy statement under the caption "ELECTION OF
DIRECTORS OF NORTHWAY--Voting Securities and Principal Holders Thereof" is
hereby incorporated herein by reference.
(b)
The
information set forth in the proxy statement under the caption "COMMON STOCK
PURCHASE INFORMATION" is hereby incorporated herein by reference.
ITEM
12. The Solicitation or Recommendation.
(Reg.
M-A
1012(d) and (e))
(d)
The
information set forth in the proxy statement under the caption "ABOUT THE ANNUAL
MEETING--Vote Required for Approval," is hereby incorporated herein by
reference.
(e)
The
information set forth in the proxy statement under the caption "THE SPLIT
TRANSACTION--SPECIAL FACTORS--Determination of Fairness of Split Transaction
by
Affiliates" is hereby incorporated herein by reference.
ITEM
13. Financial Statements.
(a)
The
information set forth in the proxy statement under the captions "SELECTED
HISTORICAL AND PRO FORMA FINANCIAL DATA" and "INFORAMTION INCORPORATED BY
REFERENCE" is hereby incorporated herein by reference.
(b)
The
information set forth in the proxy statement under the caption "SELECTED
HISTORICAL AND PRO FORMA FINANCIAL DATA" is hereby incorporated herein by
reference.
ITEM
14. Persons/Assets, Retained, Employed, Compensated or
Used.
(Reg.
M-A
1009)
(a)-(b)
The information set forth in the proxy statement under the captions "ABOUT
THE
ANNUAL MEETING--Solicitation of Proxies; Expenses of Solicitation" is hereby
incorporated herein by reference.
ITEM
15. Additional Information.
(Reg.
M-A
1011(b))
(b)
The
information set forth in the proxy statement, including all appendices attached
thereto, is hereby incorporated herein by reference.
ITEM
16. Exhibits.
(Reg.
M-A
1016(a) through (d), (f) and (g))
(a)
Preliminary Proxy Statement, together with the proxy card.*
(b)
Not
applicable.
(c)
Fairness Opinion provided by Northeast Capital & Advisory, Inc., dated April
9, 2007**
(f)
Statement describing Security Holders’ Appraisal Rights***
(g)
Not
applicable.
|
Ex
99.1
|
Northeast
Capital August 2, 2006 Presentation entitled "Cost-Benefit
Analysis -
Reverse Stock Split"
|
|
Ex
99.2
|
Northeast
Capital September 18, 2006 Presentation entitled "Typical Community
Bank
Shareholder Profile"
|
|
Ex
99.3
|
Northeast
Capital October 5, 2006 Summary of Key Findings
|
|
Ex
99.4
|
Northeast
Capital October 9, 2006 Presentation entitled "The Advantages
and
Disadvantages of Going Private"
|
|
Ex
99.5
|
Northeast
Capital December 19, 2006 Discussion Agenda
|
|
Ex
99.6
|
Northeast
Capital March 15, 2007 Worksheet entitled "Transactions over Last Two
Years"
|
|
Ex
99.7
|
Northeast
Capital January 22,2007 "Impact of a Reverse Split" 125
shares
|
|
Ex
99.8
|
Northeast
Capital January 30, 2007 Presentation entitled "Enhancing Shareholder
Value Through a Reverse Stock Split"
|
|
Ex
99.9
|
Northeast
Capital February 26, 2007 "Potential Impact of a Reverse Split"
350
shares
|
|
Ex
99.10
|
Northeast
Capital March 5, 2007 "Potential Impact of a Reverse Split"
350 shares
revised
|
|
Ex
99.11
|
Northeast
Capital April 9, 2007 Presentation entitled "The Potential
Impact of a
Going Private Reverse Stock Split"
|
|
Ex
99.12
|
Northeast
Capital April 10, 2007 "Potential Impact of a Reverse Split" 400
shares
|
|
Ex
99.13
|
Northeast
Capital June 21, 2006 Presentation entitled “Investor Relations
AnalysisӤ
|
|
Ex
99.14
|
Northeast
Capital August 4, 2006 Presentation entitled “Top 50 Bottom 100
ShareholdersӤ
|
*
Incorporated
by reference to Amendment No. 2 to the Company's Schedule 14A, filed with the
SEC on June 19, 2007
**
Incorporated
by reference to Appendix B of Exhibit (a).
*** Incorporated
by reference to the information set forth in the section entitled “THE SPLIT
TRANSACTION -- SPECIAL FACTORS - Appraisal and Dissenters’ Rights”
in
Exhibit (a)
§Confidential
status has been requested for certain portions of this document. Such
provisions have been filed separately with the CommissionAfter
due
inquiry and to the best of my knowledge and belief, the undersigned certify
that
the information set forth in this statement is true, complete and
correct.
Dated:
April 13, 2007
NORTHWAY
FINANCIAL, INC.
|
By:
/S/ William J. Woodward
William
J. Woodward
Chairman
of the Board, President, and Chief Executive Officer
|
Exhibit
Index
(a)
Preliminary Proxy Statement, together with the proxy card.*
(b)
Not
applicable.
(c)(1)
Fairness Opinion provided by Northeast Capital & Advisory, Inc., dated April
9, 2007**
(d)
Not
applicable.
(f)
Statement describing Security Holders’ Appraisal Rights***
(g)
Not
applicable.
|
Northeast
Capital August 2, 2006 Presentation entitled "Cost-Benefit Analysis
-
Reverse Stock Split"
|
|
|
Ex
99.2
|
Northeast
Capital September 18, 2006 Presentation entitled "Typical Community
Bank
Shareholder Profile"
|
|
Ex
99.3
|
Northeast
Capital October 5, 2006 Summary of Key Findings
|
|
Ex
99.4
|
Northeast
Capital October 9, 2006 Presentation entitled "The Advantages and
Disadvantages of Going Private"
|
|
Ex
99.5
|
Northeast
Capital December 19, 2006 Discussion Agenda
|
|
Ex
99.6
|
Northeast
Capital March 15, 2007 Worksheet entitled "Transactions over Last Two
Years"
|
|
Ex
99.7
|
Northeast
Capital Janaury 22,2007 "Impact of a Reverse Split" 125
shares
|
|
Ex
99.8
|
Northeast
Capital January 30, 2007 Presentation entitled "Enchancing Shareholder
Value Through a Reverse Stock Split"
|
|
Ex
99.9
|
Northeast
Capital February 26, 2007 "Potential Impact of a Reverse Split" 350
shares
|
|
Ex
99.10
|
Northeast
Capital March 5, 2007 "Potential Impact of a Reverse Split" 350 shares
revised
|
|
Ex
99.11
|
Northeast
Capital April 9, 2007 Presentation entitled "The Potential Impact
of a
Going Private Reverse Stock Split"
|
|
Ex
99.12
|
Northeast
Capital April 10, 2007 "Potential Impact of a Reverse Split" 400
shares
|
|
Ex
99.13
|
Northeast Capital June 21, 2006 Presentation entitled "Investor Relaions Analysis"§ |
| Ex 99.14 | Northeast Capital August 4, 2006 Presentation entitled "Top 50 Bottom 100 Shareholders"§ |
* Incorporated by reference to Amendment No. 2 to the Company's Schedule 14A, filed with the SEC on June 19, 2007.
**
Incorporated
by reference to Appendix B of Exhibit (a).
*** Incorporated by reference to the information set forth in the section
entitled “THE SPLIT TRANSACTION -- SPECIAL FACTORS - Appraisal and Dissenters’
Rights” in
Exhibit (a)
§Confidential
status has been requested for certain portions of this document. Such
provisions have been filed separately with the Commission