Vac maker Royal Appliance filed a proxy statement with the Securities and Exchange Commission that set an April 22 date for a special shareholders meeting to vote on the proposed acquisition by Techtronic Industries. The filing also said it would pay bonuses to 14 of its officers to stay with the company after the acquisition.
TTI, which is based in Hong Kong, is offering Royal shareholders U.S. $7.37 per share‚ in cash, or a total purchase price of approximately $105 million. Following the
acquisition, Royal will be operated as a subsidiary of TTI.
According to the SEC filing, the two largest shareholders of Royal, John Rochon and E. Patrick Nalley, entered into voting agreements with TTI to adopt the merger agreement. Together, they own 31 percent of Royal's outstanding shares.
The proxy statement also noted that 14 officers of Royal, including four executive officers, were party to severance and employment agreements that are designed to retain the executives and provide for continuity of management in the event of any actual or threatened change in the control of the company. The filing stated that in exchange for the 14 officers terminating their agreements and entering into new
ones with the acquired company, they will receive payments totaling $2.4 million upon consummation of the acquisition and, based on achieving certain levels of profitability in 2003, could earn an additional $3.5 million.
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