Item 1.01. Entry into a Material Definitive Agreement.
As previously disclosed, Allegro MicroSystems, Inc. (the "Company") is party to
a Stockholders Agreement, dated as of September 30, 2020, as modified by the
Addendum to the Stockholders Agreement dated June 30, 2021 (as amended by the
addendum, the "Original Agreement"), by and among the Company, OEP SKNA, L.P., a
Cayman Islands exempted limited partnership ("OEP"), and Sanken Electric Co.,
Ltd., a Japanese corporation ("Sanken" and together with OEP, the
"Stockholders").
On June 16, 2022, the Company and the Stockholders entered into an Amended and
Restated Stockholders Agreement (the "Amended and Restated Stockholders
Agreement"). The Amended and Restated Stockholders Agreement restates the terms
of the Original Agreement and modifies it to: (i) expand the size of the
Company's Board of Directors (the "Board") to 11 members; (ii) designate Katsumi
Kawashima, Kojiro Hatano and Richard R. Lury as the Pre-Approved Sanken
Directors (as defined in the Amended and Restated Stockholders Agreement); (iii)
designate Andrew G. Dunn and Paul Carl (Chip) Schorr IV as the Pre-Approved OEP
Directors (as defined in the Amended and Restated Stockholders Agreement); and
(iv) designate David J. Aldrich, Susan D. Lynch and Joseph R. Martin as the
Pre-Approved OEP Independent Directors (as defined in the Amended and Restated
Stockholders Agreement).
The Amended and Restated Stockholders Agreement also provides that for so long
as both Sanken and its affiliates and OEP each beneficially own at least five
percent or more of all issued and outstanding shares of the Company's common
stock (the "Common Stock"), the Stockholders shall be entitled to jointly
designate for nomination by the Board a total of up to one OEP-Sanken joint
director to serve on the Board as the "Pre-Approved OEP-Sanken Joint Director."
Under the Amended and Restated Stockholders Agreement, Reza Kazerounian is
designated as the Pre-Approved OEP-Sanken Joint Director.
Additionally, under the terms of the Amended and Restated Stockholders
Agreement, the Board's Nominating and Corporate Governance Committee (the
"Nominating and Corporate Governance Committee") shall have the right to
designate for nomination by the Board a total of up to one director as the
"Nom/Gov Director," and Yoshihiro Suzuki is designated under the agreement as
the Nom/Gov Director. The Amended and Restated Stockholders Agreement states
that Mr. Suzuki shall serve as the Chairperson of the Board until his current
term as a Class II director expires, after which the Chairperson of the Board
shall be appointed by the Board upon the recommendation of the Nominating and
Corporate Governance Committee.
The Amended and Restated Stockholders Agreement also modifies the Original
Agreement to clarify that the Stockholders will agree to vote or take necessary
action to cause the election of the Pre-Approved OEP-Sanken Joint Director and
that potential future actions with respect to the Pre-Approved OEP-Sanken Joint
Director, including designating a replacement, requesting the director tender a
resignation, and removing the director, must be mutually agreed to by OEP and
Sanken.
Additionally, the Amended and Restated Stockholders Agreement specifies that if
OEP ceases to be entitled to any right or benefit under the agreement because
OEP and its affiliates cease to beneficially own, directly or indirectly, either
(A) at least five percent of the issued and outstanding shares of Common Stock,
or (B) any shares of Common Stock, then the Amended and Restated Stockholders
Agreement will not terminate, and instead, any such right or benefit will
automatically become a right or benefit of the Nominating and Corporate
Governance Committee for so long as the Amended and Restated Stockholders
Agreement remains in effect, and the Nominating and Corporate Governance
Committee shall have the right to enforce any such rights or benefits mutatis
mutandis as though it were OEP under any applicable provision (but without
regard to any share ownership requirements set forth therein), leaving all of
Sanken's and the Company's obligations in respect of any such provisions in full
force and effect. In addition, if OEP and its affiliates cease to beneficially
own, directly or indirectly, at least five percent of the Company's issued and
outstanding shares of Common Stock, then OEP will no longer need to obtain
Sanken's prior written consent before requesting removal of an OEP Director, or
designating a replacement as either an OEP Director or an OEP-Independent
Director (as such terms are defined in the Amended and Restated Stockholders
Agreement).
The foregoing description of the Amended and Restated Stockholders Agreement
does not purport to be complete and is qualified in its entirety by reference to
the complete text of the Amended and Restated Stockholders Agreement, a copy of
which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
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Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On June 16, 2022, Noriharu Fujita notified the Board of his decision to resign
from the Board, effective June 20, 2022. Mr. Fujita's resignation is not the
result of any disagreement between Mr. Fujita and the Company or its management
on any matter relating to the Company's operations, policies or practices.
On June 20, 2022, at the recommendation of the Nominating and Corporate
Governance Committee and in accordance with the Amended and Restated
Stockholders Agreement, the Board took the following actions, each of which was
effective June 20, 2022: (i) increased the size of the Board from ten to 11
directors; (ii) elected Katsumi Kawashima to the Board as Mr. Fujita's successor
as a Class I Director, to serve until the Company's 2024 annual meeting of
shareholders and until his successor is duly elected and qualified; and (iii)
elected Kojiro Hatano to the Board as a Class II Director, to serve until the
Company's 2022 annual meeting of shareholders and until his successor is duly
elected and qualified.
Messrs. Kawashima and Hatano were elected to the Board as designees of Sanken
pursuant to and as set forth in Section 1(b) of the Amended and Restated
Stockholders Agreement. See Item 1.01 for additional information regarding the
Amended and Restated Stockholders Agreement.
Mr. Hatano has served as Manager of Business Performance for the Company since
January 2006. During fiscal year 2022 he received compensation, consisting of
salary, benefits and reimbursement of living expenses of approximately $206,000
from the Company. This amount was partially reimbursed to the Company by Sanken.
In addition to his role with the Company, Mr. Hatano has had roles with Sanken
and Polar Semiconductor, LLC ("PSL"), an entity owned by the Company and Sanken.
Mr. Hatano has served as General Manager of U.S. Business Enhancement for Sanken
since April 2022. He was recently named Chairman and Chief Executive Officer of
PSL, effective May 24, 2022. In addition, since May 2021, Mr. Hatano has served
as a member of the board of directors of PSL, and he has served on the board of
directors of Sanken Electric Europe Limited since March 2020.
In connection with their appointments, the Company entered into separate
indemnification agreements with Messrs. Kawashima and Hatano providing for the
indemnification of and advancement of expenses permitted by Delaware law for
claims, suits or proceedings arising out of a director's service to the Company.
Messrs. Kawashima and Hatano, as Board designees of Sanken, will not receive
compensation from the Company for their service on the Board.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
Exhibit 10.1 Amended and Restated Stockholders Agreement of Allegro
MicroSystems, Inc., dated as of June 16, 2022.
Exhibit 104 Cover Page Interactive Data File (formatted as Inline XBRL and
contained in Exhibit 101).
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