Item 1.01 Entry into a Material Definitive Agreement.
In connection with the completion of the Mergers, SYNNEX entered into an
Investor Rights Agreement (the "Investor Rights Agreement") with Tiger Parent
Holdings, L.P. ("Tiger Holdings").
Board of Directors
Pursuant to the Investor Rights Agreement, following the closing of the Merger,
the board of directors of SYNNEX (the "Board") is comprised of eleven directors,
and Tiger Holdings has the right to nominate a certain number of directors,
depending on the percentage of the outstanding shares of SYNNEX Stock held by
Tiger Holdings or certain of its affiliates. Specifically, Tiger Holdings shall
have the right to nominate:
(i) up to four directors, if it owns 30% or more of the outstanding shares of
SYNNEX Stock, two of which must be "independent" directors, within the
meaning of the New York Stock Exchange;
(ii) up to three directors, if it owns between 20% and 30% of the outstanding
shares of SYNNEX Stock, one of which must be an independent director;
(iii) up to two directors, if it owns between 10% and 20% of the outstanding
shares of SYNNEX Stock; and
(iv) up to one director, if it owns between 5% and 10% of the outstanding
shares of SYNNEX Stock.
The directors nominated by Tiger Holdings shall be referred to herein as "Apollo
Directors." The initial Apollo Directors nominated by Tiger Holdings were Robert
Kaslow-Ramos, Nayaki Nayyar, Matthew Nord, and Merline Saintil, each of whom
were required to be mutually acceptable to SYNNEX. Pursuant to the Investor
Rights Agreement, any replacement Apollo Director must be approved by a majority
of the directors on the Board that are not Apollo Directors.
The Investor Rights Agreement also provides that, of the remaining directors who
are not Apollo Directors, one director shall be the then-serving Chief Executive
Officer of SYNNEX, currently Mr. Richard T. Hume, and the other directors will
be nominated in accordance with the provisions of SYNNEX' bylaws and Certificate
of Incorporation, currently Dennis Polk, Fred A. Breidenbach, Hau L. Lee, Ann
Vezina and Duane E. Zitzner. In the event the size of the Board is increased or
decreased to other than eleven directors, the number of Apollo Directors will be
proportionately increased or decreased to most closely equal the percentage of
the Board originally consisting of Apollo Directors. The Board may determine the
composition and makeup of any committees of the Board. The lead independent
director will also be selected by the Board. Apollo Directors must fulfill their
pro rata portion of any diversity requirements pursuant to law, stock exchange
rules, or other regulatory requirements based on the percentage of the Board
consisting of Apollo Directors.
Directors' and Officers' Insurance
Under the Investor Rights Agreement, SYNNEX must maintain directors' and
officers' liability insurance as determined by the Board. SYNNEX agrees that
SYNNEX will be the primary indemnitor for SYNNEX directors.
Information Rights
Under the Investor Rights Agreement, for so long as Tiger Holdings and its
. . .
Item 1.02 Termination of a Material Definitive Agreement.
In connection with the closing of the Mergers, SYNNEX repaid in full all amounts
outstanding and terminated all outstanding commitments under each of its
previously disclosed (i) senior secured credit agreement originally entered into
on August 9, 2018 with JPMorgan Chase Bank, N.A., as administrative agent, the
lenders party thereto, and certain United States subsidiaries of SYNNEX, as
guarantors, pursuant to which term loans were made available to SYNNEX and of
which a principal amount of $1,000,000,000 of term loans were outstanding on the
date of repayment and termination and (ii) senior secured credit agreement
originally entered into on November 27, 2013 with Bank of America, N.A., as
administrative agent, the lenders and letter of credit issuers party thereto,
and certain United States subsidiaries of SYNNEX, as guarantors, pursuant to
which a revolving credit facility and term loans were made available to SYNNEX
and of which a principal amount of $500,000,000 of term loans were outstanding
on the date of repayment and termination.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The information set forth in the "Introductory Note" under "Closing of the Tech
Data Acquisition" above is incorporated by reference into this Item 2.01 of this
Current Report.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth in the "Introductory Note" under "Closing of the Tech
Data Acquisition" above is incorporated by reference into this Item 3.02 of this
Current Report.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Effective as of the closing of the Mergers, and expressly conditioned thereupon,
on September 1, 2021, Mr. Dennis Polk resigned as Chief Executive Officer of
SYNNEX and was appointed as the Executive Chair of the Board.
Effective as of the closing of the Mergers, and expressly conditioned thereupon,
on September 1, 2021, Mr. Richard T. Hume was appointed as the Chief Executive
Officer of SYNNEX and a member of the Board.
In connection with his appointment, SYNNEX entered into an offer letter with
Mr. Hume dated August 31, 2021 (the "Offer Letter"). Pursuant to the terms of
the Offer Letter, Mr. Hume will receive a starting annualized base salary of
$960,000 and will be eligible to receive an annual cash bonus targeted at 2.5
times his base salary beginning in the fiscal year ending November 30, 2022 (but
which shall be pro-rated for the fiscal year ending November 30, 2022) with the
actual amount of the bonus based on the achievement of performance metrics
established by the compensation committee of the Board. Mr. Hume will be
eligible to receive his existing Tech Data bonus with respect to the 12-month
period ending January 31, 2022, which shall be determined by the compensation
committee of the Board based on the Tech Data annual bonus plan for its fiscal
year ending January 31, 2022. In addition, the Offer Letter provides that
Mr. Hume will be granted (i) an option to purchase shares of our common stock
with a grant date fair value of approximately $2,100,000 and (ii) restricted
stock or restricted stock unit awards for shares of our common stock with a fair
market value of approximately $1,540,000. The Offer Letter also provides for
certain payments to Mr. Hume in the event of a termination without "cause" or by
Mr. Hume for "good reason" (as such terms are defined in the Offer Letter) and
also in the event of a termination without "cause" or by Mr. Hume for "good
reason" in connection with a change of control of SYNNEX. The Offer Letter
contains certain restrictive covenants, including a non-competition and
non-solicitation provision, for the benefit of SYNNEX. The foregoing description
of the Offer Letter is qualified in its entirety by reference to the full text
of the Offer Letter, which is filed as Exhibit 10.2 hereto and is incorporated
herein by reference.
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Mr. Hume, age 62, has served as Chief Executive Officer and as a director of
Tech Data since June 2018, and prior to that served as its Executive Vice
President, Chief Operating Officer from March 2016. Prior to joining Tech Data,
Mr. Hume was with IBM for more than 30 years, most recently serving as General
Manager and COO, Global Technology Services. Mr. Hume holds a bachelor's degree
in Accounting from the Pennsylvania State University.
In connection with Mr. Hume's appointment, SYNNEX entered into its standard form
of indemnification agreement with Mr. Hume. A form of the indemnification
agreement was previously filed as Exhibit 10.6 to SYNNEX' Registration Statement
on Form S-1 filed with the SEC on September 5, 2003.
There are no arrangements or understandings between Mr. Hume and any other
persons pursuant to which he was selected to serve as Chief Executive Officer of
SYNNEX, contingent on and effective at the closing of the Mergers, other than as
set forth in the Merger Agreement. There are no family relationships between
Mr. Hume and any previous or current officers or directors of SYNNEX, and there
are no related party transactions reportable under Item 404(a) of Regulation
S-K.
Additionally, on September 1, 2021, Laurie Simon Hodrick, Kevin Murai, Dwight
Steffensen, Thomas Wurster, and Andrea Zulberti resigned from the Board, and
Matthew Nord, Robert Kaslow-Ramos, Nayaki Nayyar, and Merline Saintil were
appointed thereto upon the nomination of Tiger Holdings pursuant to the terms of
the Investor Rights Agreement, a summary of such terms of which are included in
Item 1.01 and are incorporated herein by reference. There are no related party
transactions reportable under Item 404(a) of Regulation S-K for any of these
newly named directors, and each of the newly named directors will receive the
same compensation currently payable to SYNNEX' non-employee directors, including
for service on committees and as committee chairpersons, as described in the
SYNNEX' proxy statement filed in connection with the 2021 Annual Meeting of
Stockholders.
Additionally, as of September 1, 2021, Ann Vezina was appointed as the Lead
Independent Director. Ms. Vezina will receive the same compensation currently
payable to SYNNEX' lead director as described in SYNNEX' proxy statement filed
. . .
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
In connection with the closing of the Mergers, on August 31, 2021, the Board
approved and adopted the Second Amended and Restated Bylaws, pursuant to which
certain provisions relating to the number and election of the members of the
board of directors were revised to reflect the provisions of the Investor Rights
Agreement.
The foregoing description of the Second Amended and Restated Bylaws is qualified
in its entirety by reference to the full text of the Second Amended and Restated
Bylaws, a copy of which is attached as Exhibit 3(ii).1 to this report and
incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
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On September 1, 2021, SYNNEX issued a press release announcing the completion of
the Mergers and a press release announcing the new Board. A copy of the releases
are furnished herewith as Exhibit 99.1 and Exhibit 99.2 and are incorporated
herein by reference. The information in this Form 8-K under Item 7.01 and
Exhibit 99.1 and Exhibit 99.2 attached hereto shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange
Act") or otherwise subject to the liabilities of that section, nor shall they be
deemed incorporated by reference in any filing under the Securities Act of 1933
or the Exchange Act, except as expressly set forth by specific referencing in
such filing.
Item 8.01 Other Events.
On June 30, 2021, SYNNEX held a Special Meeting of Stockholders at which SYNNEX'
stockholders approved an amendment to the Certificate of Incorporation of SYNNEX
to increase the number of authorized shares of SYNNEX Stock from 100 million
shares to 200 million shares (the "Certificate of Amendment"). In connection
with the closing of the Mergers, on August 31, 2021, SYNNEX filed the
Certificate of Amendment. A complete copy of the Certificate of Incorporation,
as amended, is attached hereto as Exhibit 3(i).1.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
The audited consolidated financial statements of Tiger Parent (AP) Corporation
and subsidiaries as of and for the fiscal years ending January 31, 2021 and 2020
and the notes related thereto are filed as Exhibit 99.3 hereto and are
incorporated herein by reference.
The consent of Ernst & Young LLP, Tiger Parent (AP) Corporation's independent
auditor, is attached hereto as Exhibit 23.1.
The unaudited consolidated financial statements of Tiger Parent (AP) Corporation
and subsidiaries as of April 30, 2021 and January 31, 2021 and for the three
months ended April 30, 2021 and April 30, 2020 and the notes related thereto are
filed as Exhibit 99.4 hereto and are incorporated herein by reference.
(b) Pro Forma Financial Information
The unaudited pro forma condensed combined financial information of SYNNEX
Corporation as of May 31, 2021, for the six months ended May 31, 2021 and for
the twelve months ended November 30, 2020, after giving effect to the
acquisition of Tiger Parent (AP) Corporation and adjustments described in such
pro forma financial information, is attached hereto as Exhibit 99.5 and
incorporated herein by reference.
(d) Exhibits.
Exhibit No. Description
2.1* Agreement and Plan of Merger, dated as of March 22, 2021, by
and among SYNNEX, Spire Sub I, Inc., Spire Sub II, LLC, and Tiger
Parent (AP) Corporation (incorporated by reference to Exhibit 2.1
of the Current Report on Form 8-K filed on March 22, 2021).
3(i).1 Restated Certificate of Incorporation of SYNNEX Corporation, as
amended.
3(ii).1 Second Amended and Restated Bylaws.
10.1 Investor Rights Agreement dated September 1, 2021 between
SYNNEX and Tiger Parent Holdings, L.P.
10.2+ Offer Letter with Richard Hume dated August 31, 2021.
23.1 Consent of Ernst & Young LLP, independent auditors of Tiger
Parent (AP) Corporation.
99.1 Press Release dated September 1, 2021 announcing completion of
the Mergers.
99.2 Press Release dated September 1, 2021 announcing the new Board.
99.3 Consolidated Financial Statements of Tiger Parent (AP)
Corporation as of and for the fiscal years ending January 31,
2021 and 2020 (incorporated by reference to "Index to
Consolidated Financial Statements of Tiger Parent" of the
Definitive Proxy Statement on Schedule 14A filed on June 9,
2021).
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99.4 Unaudited consolidated financial statements of Tiger Parent (AP)
Corporation and subsidiaries as of April 30, 2021 and January 31,
2021 and for the three months ended April 30, 2021 and April 30, 2020
(incorporated by reference to Exhibit 99.1 of the Current Report on
Form 8-K filed on July 26, 2021).
99.5 Unaudited Pro Forma Condensed Combined Financial Information
(incorporated by reference to Exhibit 99.3 to the Current Report on
Form 8-K filed on July 26, 2021).
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
*Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K.
SYNNEX hereby undertakes to furnish supplementally a copy of any omitted
schedule or exhibit to such agreement to the U.S. Securities and Exchange
Commission upon request; provided, however, that SYNNEX may request confidential
treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended, for any schedules so furnished.
+Indicates management contract or compensatory plan or arrangement.
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