Item 1.02 Termination of a Material Definitive Agreement.
As previously disclosed, Inphi Corporation ("Inphi") entered into the Agreement
and Plan of Merger and Reorganization (the "Merger Agreement"), dated October
29, 2020, by and among Marvell Technology Group Ltd. ("Marvell"), Marvell
Technology, Inc. ("MTI"), Maui Acquisition Company Ltd, a Bermuda exempted
company and wholly owned subsidiary of MTI ("Bermuda Merger Sub") and Indigo
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of MTI
("Delaware Merger Sub"). Effective as of 4:01 p.m. Eastern Time on April 20,
2021 (such date, the "Merger Effective Date"), Bermuda Merger Sub merged with
and into Marvell (the "Bermuda Merger"), with Marvell continuing as a wholly
owned subsidiary of MTI. Effective as of 4:02 p.m. Eastern Time on the Merger
Effective Date (the "Delaware Merger Effective Time"), Delaware Merger Sub
merged with and into Inphi (the "Delaware Merger" and, together with the Bermuda
Merger, the "Mergers"), with Inphi continuing as a wholly owned subsidiary of
MTI. As a result of the Mergers, Marvell and Inphi became wholly owned
subsidiaries of MTI.
Termination of Capped Call Transactions
On September 6, 2016, in connection with the pricing of Inphi's outstanding
0.75% Convertible Senior Notes due 2021 (the "2021 Notes"), Inphi entered into
privately negotiated capped call transactions (together, the "2016 Base Capped
Call Transactions") with each of Morgan Stanley & Co. LLC and JPMorgan Chase
Bank, National Association, London Branch (together, the "2016 Option
Counterparties"). In addition, on September 7, 2016, Inphi entered into
additional capped call transactions (together with the 2016 Base Capped Call
Transactions, the "2016 Capped Call Transactions") with each of the 2016 Option
Counterparties.
On April 21, 2020, in connection with the pricing of Inphi's outstanding 0.75%
Convertible Senior Notes due 2025 (the "2025 Notes"), Inphi entered into
privately negotiated capped call transactions (together, the "2020 Base Capped
Call Transactions") with an affiliate of one of the initial purchasers and other
financial institutions (the "2020 Option Counterparties" and, collectively with
the 2016 Option Counterparties, the "Option Counterparties"). In addition, on
April 22, 2020, in connection with the exercise by the initial purchasers of
their option to purchase additional 2025 Notes, Inphi entered into additional
capped call transactions (together with the 2020 Base Capped Call Transactions,
the "2020 Capped Call Transactions" the 2016 Capped Call Transactions and the
2020 Capped Call Transactions collectively, the "Capped Call Transactions") with
each of the 2020 Option Counterparties.
In connection with the Delaware Merger, Inphi and the Option Counterparties
entered into certain agreements (the "Unwind Agreements") to terminate certain
portions of the Capped Call Transactions. The Unwind Agreements provide for such
terminations to occur over a period of time from, and including, the trading
days immediately following the Delaware Merger Effective Time to, and including
June 1, 2021, subject to postponement in certain circumstances (the "Unwind
Period"). In connection with the related unwind of the existing hedge positions
with respect to the Capped Call Transactions, the Companies expect the Option
Counterparties and/or their affiliates to enter into or unwind various
derivative transactions economically equivalent to selling shares of MTI common
stock and/or to sell shares of MTI common stock during the Unwind Period.
The above description of the Capped Call Transactions is a summary only and is
qualified in its entirety by reference to the capped call confirmations and
forms of capped call confirmations executed by Inphi and the Option
Counterparties as of the respective dates specified above, copies of which were
filed as Exhibits 10.19, 10.20, 10.21, 10.36 and 10.37 to the Annual Report on
Form 10-K filed by Inphi on February 25, 2021, and are incorporated by reference
herein.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Separation Agreements
In connection with the consummation of the Mergers, on April 20, 2021, Inphi
entered into Separation Agreements (the "Separation Agreements"), with each of
(i) Dr. Ford Tamer, Inphi's President and Chief Executive Officer, (ii) Richard
Ogawa, Inphi's General Counsel, (iii) Charlie Roach, Inphi's Senior Vice
President of Worldwide Sales, and (iv) Dr. Ron Torten, Inphi's Chief Information
Officer and Senior Vice President of Operations (collectively, the "Former
Officers"). Pursuant to the Merger Agreement and the Separation Agreements,
effective as of immediately prior to the Delaware Merger Effective Time, each of
the Former Officer's employment with Inphi was terminated without cause, and, as
of the Merger Effective Date, each Former Officer also resigned from certain
officer and director positions held by them in Inphi and Inphi's subsidiaries,
affiliates or investments. In connection with their resignations and in exchange
for the execution of a release of claims, the Former Officers became entitled to
receive the following severance benefits pursuant to the Merger Agreement and
the Severance and Change of Control Agreements between each of the Former
Officers and Inphi (as adjusted to include an additional 60 days' continued
wages and benefits in lieu of any potential notice required under the Workers
Adjustment and Retraining Notification Act, pursuant to the Separation
Agreements), in each case subject to applicable tax withholding:
• a lump sum payment, which amount represents (i) 26 months' current base
salary, equal to a gross sum of $1,306,500 in the case of Dr. Tamer,
(ii) 14 months' current base salary, equal to a gross sum of $399,000 in
the case of Mr. Ogawa, (iii) 14 months' current base salary, equal to a
gross sum of $448,000 in the case of Mr. Roach, and (iv) 14 months'
current base salary, equal to a gross sum of $432,600 in the case of
Dr. Torten;
• a lump sum payment, which amount represents (i) 26 months of Dr. Tamer's
annual target bonus, equal to $1,437,150, (ii) 14 months of Mr. Ogawa's
annual target bonus, equal to $251,370, (iii) 14 months of Mr. Roach's
annual target bonus, equal to $366,545, and (iv) 14 months of
Dr. Torten's annual target bonus, equal to $324,450;
• a lump sum payment, which amount represents a pro rata payment of the
Former Officer's 2021 target bonus through the Merger Effective Date,
equal to (i) $199,899 in the case of Dr. Tamer, (ii) $64,933 in the case
of Mr. Ogawa, (iii) $94,685 in the case of Mr. Roach, and (iv) $83,811 in
the case of Dr. Torten;
• payment of a portion of the premiums for the Former Officer and the
Former Officer's dependents required for continued health coverage under
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA") (up to the monthly amount Inphi was paying as the
employer-portion of health care premiums prior to termination of
employment), provided that the Former Officer timely elects to extend and
continue health insurance under COBRA, until the earlier of (a) the end
of the 14-month period (26-month period for Mr. Tamer) following such
Former Officer's termination date or (b) the date the Former Officer or
the Former Officer's eligible dependents lose eligibility for COBRA
coverage.
• acceleration of vesting of RSUs with respect to shares of common stock of
Inphi (the "Inphi Common Stock") immediately prior to the Mergers as
follows:
i. full acceleration of vesting of RSUs granted as each Former Officer's
fiscal year 2020 bonus;
ii. accelerated vesting of the RSUs granted as each Former Officer's 2021
Focal Equity Award that were scheduled to vest through June 30, 2021;
and
iii. full acceleration of vesting of all other RSUs held by each Former
Officer.
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In addition, the Former Officers vested in 225% of the target number of shares
of Inphi Common Stock subject to each Former Officer's 2020 MVSU award based on
performance through the closing of the Mergers pursuant to the terms of the MVSU
awards.
This summary of the Separation Agreements is qualified in its entirety by the
each of the Separation Agreements of Dr. Tamer, Mr. Ogawa, Mr. Roach, and
Dr. Torten attached as Exhibits 10.1, 10.2, 10.3 and 10.4 respectively, to this
Current Report and incorporated by reference into this item 5.02.
Departure of John Edmunds
In connection with the consummation of the Mergers, on April 20, 2021, John
Edmunds, Inphi's Vice President and Chief Financial Officer, was terminated
without cause and, as of the Merger Effective Date, also resigned from his
positions held in Inphi and Inphi's subsidiaries, affiliates or investments.
Officer Appointments
At the Delaware Merger Effective Time and pursuant to the Merger Agreement, all
members of the board of directors of Inphi ceased to be directors of Inphi and
were replaced by Mitchell Gaynor, and each of the former executive officers of
Inphi ceased to hold his or her respective office with Inphi and the officers of
Inphi were replaced by the following persons:
Name Title
Jean Hu President and Chief Financial Officer
Mitchell Gaynor Chief Legal Officer and Secretary
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
10.1 Confidential Separation Agreement, dated as of April 20, 2021, by
and between Inphi Corporation and Dr. Ford Tamer.
10.2 Confidential Separation Agreement, dated as of April 20, 2021, by
and between Inphi Corporation and Richard Ogawa.
10.3 Confidential Separation Agreement, dated as of April 20, 2021, by
and between Inphi Corporation and Charles Roach.
10.4 Confidential Separation Agreement, dated as of April 20, 2021, by
and between Inphi Corporation and Dr. Ron Torten.
104 Cover Page Interactive Data File (formatted as Inline XBRL).
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