Restoration Hardware (RSTO) Receives Shareholder Approval for Merger Agreement; Settles Class Action Suit

June 12, 2008 3:32 PM EDT

Restoration Hardware, Inc. (Nasdaq: RSTO) announced that its shareholders adopted the amended merger agreement between Restoration Hardware and certain affiliates of Catterton Partners. The amended merger agreement was adopted today at a special meeting of shareholders of Restoration Hardware's outstanding shares of common stock, with more than 99% of the votes cast in favor of the amended merger agreement.

Restoration Hardware expects that the transactions contemplated by the amended merger agreement will be completed next week. Under the terms of the amended merger agreement, all of the outstanding shares of common stock of Restoration Hardware, other than those exchanged by certain shareholders participating with Catterton Partners in the transaction, will be acquired for a price per share equal to $4.50 in cash.

Restoration Hardware also announced that it reached a preliminary agreement for the settlement of a shareholder complaint filed in the Superior Court of the State of California as a purported class action on behalf of the public shareholders of Restoration Hardware. The complaint was filed against Restoration Hardware, each of its directors, Catterton Partners and certain shareholders participating in the transaction.

Under the terms of the settlement, the action will be dismissed with prejudice. As part of the settlement, the defendants in the litigation will establish a common fund of $3.7 million, less the plaintiff's attorneys' fees, to be paid to Restoration Hardware shareholders as of the closing of the merger transaction other than those shareholders participating with Catterton Partners in the transaction or those shareholders who are also executive officers or directors of Restoration Hardware. The settlement is contingent on the closing of the merger, preliminary approval by the court, and final approval by the court after notice to the class. Depending on the amount of the attorneys' fees approved by the court and certain other contingencies, the common fund will likely result in a payment of approximately $0.10 to $0.13 per share to the members of the class.

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