| [{"text": "Prospect Group Inc., whose recent hostile tender offer for Recognition Equipment Inc. failed for lack of financing, apparently has gained a measure of control over the troubled company anyway."}, {"text": "As part of what a Recognition spokeswoman termed an 'amiable agreement,' Prospect Group will wind up with control of top management posts and an increased stake in the maker of data management equipment."}, {"text": "In a management restructuring, Thomas L. Ringer resigned as chairman, chief executive and a director, while Israel Sheinberg resigned as a director."}, {"text": "Mr. Sheinberg remains as executive vice president."}, {"text": "Thomas M. Hurley and Robert A. Vanourek, who had been designated to take over Recognition's top spots had Prospect's tender offer succeeded, were named co-chief executives and directors."}, {"text": "Mr. Hurley was formerly a vice president and general manager of an Avery International division; Mr. Vanourek was a former group vice president of Pitney Bowes Inc."}, {"text": "In addition, the agreement calls for Gilbert H. Lamphere, chairman of Prospect Group's executive committee, to be named chairman of a restructured board that will include four new independent directors."}, {"text": "Also named to the revised board was Thomas A. Loose, Recognition's senior vice president and general counsel."}, {"text": "Prospect, a New York-based leveraged buy-out firm, also agreed to invest $15 million in Recognition, which in turn agreed to repurchase as much as $20 million of its stock."}, {"text": "That would increase Prospect's ownership of the company's fully-diluted shares outstanding to 20% from 14.1%."}, {"text": "Under the agreement, Prospect is permitted to increase its stake in Recognition to 30%."}, {"text": "Beyond that, Prospect said it wouldn't offer to acquire additional shares for less than $11.25 a share during the next year or less than $14.06 a share during the subsequent two years."}, {"text": "Recognition also said it obtained a commitment from Chemical Bank and Bank of Boston to convert an estimated $18 million in bank debt to a new, 24-month secured term loan to be repaid through the sale of certain assets."}, {"text": "In August, Recognition said it was in violation of certain terms of its debt agreements with bank lenders because of a $3.9 million loss for the third quarter ended July 31."}, {"text": "The company attributed the loss to declining revenue and litigation costs relating to criminal charges against the company and two former executives, William G. Moore Jr. and Robert W. Reedy."}, {"text": "The former executives were indicted last October on charges of fraud, theft and conspiracy related to efforts by the company to win $400 million in Postal Service contracts."}, {"text": "Recognition Equipment said it expected to put the agreement with Prospect to a vote of its stockholders at a special meeting in January."}, {"text": "In New York Stock Exchange composite trading, Recognition rose 87.5 cents to $6.625."}, {"text": "Prospect slipped 25 cents to $10.50 in national over-the-counter trading."}] |