Two top Linear Corp. executives, Chairman William Schanbacher and President Ted Farrell, announced that they have signed agreements documenting their previously announced intention of giving Interactive Technologies Inc. of North St. Paul, Minn., the option of buying the Linear shares the two men own. Their shares combined represent 34% of Linear's total outstanding.
The agreement gives ITI until June 15 the option to buy 1,045,947 Linear shares at $12 each, plus an additional $2 per share if Linear meets certain sales and profit levels for fiscal 1988. At Friday's close, Linear stock traded over the counter at $10.75 bid.
IF ITI exercises its option, the company will "consider either the commencement of a tender offer or proposing a merger to acquire the remaining (Linear) shares (outstanding) at the same price," according to a prepared statement.
In an interview Friday, Farrell said ITI management has assured him that it will make the same offer for the shares held by the rest of Linear shareholders as was made for his and Schanbacher's.
Blaine Roberts, a La Jolla investment adviser who represents investors holding 8.6% of Linear shares, criticized the wording of the option as too vague to suit him. "I don't see anything in the wording that makes it sure that minority shareholders will get the same treatment as control shareholders Schanbacher and Farrell," Roberts said.
ITI Chairman Thomas Auth was not available for comment Friday afternoon.