S
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
£
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
94-2703333
|
(State or other jurisdiction of
incorporation or organization)
|
|
(IRS Employer
Identification No.)
|
|
|
|
44201 Nobel Drive
Fremont, California
|
|
94538
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
S
|
Accelerated filer
£
|
Non-accelerated filer
£
|
Smaller reporting company
£
|
|
Class
|
|
Outstanding as of March 31, 2014
|
||||
Common Stock, $0.001 par value
|
|
39,099,916
|
|
|
|
|
|
Page
|
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
Item 1A.
|
||
Item 6.
|
||
|
||
|
|
February 28,
2014 |
|
November 30,
2013 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
148,403
|
|
|
$
|
151,622
|
|
Short-term investments
|
14,007
|
|
|
15,134
|
|
||
Accounts receivable, net
|
1,556,993
|
|
|
1,593,191
|
|
||
Receivable from related parties
|
780
|
|
|
146
|
|
||
Inventories
|
1,225,487
|
|
|
1,095,107
|
|
||
Current deferred tax assets
|
18,478
|
|
|
22,031
|
|
||
Other current assets
|
160,541
|
|
|
54,502
|
|
||
Total current assets
|
3,124,689
|
|
|
2,931,733
|
|
||
Property and equipment, net
|
168,508
|
|
|
133,249
|
|
||
Goodwill
|
376,402
|
|
|
188,535
|
|
||
Intangible assets, net
|
200,542
|
|
|
23,772
|
|
||
Deferred tax assets
|
366
|
|
|
7,867
|
|
||
Other assets
|
58,066
|
|
|
40,733
|
|
||
Total assets
|
$
|
3,928,573
|
|
|
$
|
3,325,889
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Borrowings under securitization, term loans and lines of credit
|
$
|
480,881
|
|
|
$
|
252,523
|
|
Accounts payable
|
1,304,717
|
|
|
1,350,040
|
|
||
Payable to related parties
|
9,902
|
|
|
3,861
|
|
||
Accrued liabilities
|
225,272
|
|
|
181,325
|
|
||
Income taxes payable
|
12,008
|
|
|
1,629
|
|
||
Total current liabilities
|
2,032,780
|
|
|
1,789,378
|
|
||
Long-term borrowings
|
281,826
|
|
|
65,405
|
|
||
Long-term liabilities
|
77,027
|
|
|
56,418
|
|
||
Deferred tax liabilities
|
10,999
|
|
|
3,047
|
|
||
Total liabilities
|
2,402,632
|
|
|
1,914,248
|
|
||
Commitments and contingencies (Note 17)
|
|
|
|
||||
SYNNEX Corporation stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value, 5,000 shares authorized, no shares issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value, 100,000 shares authorized, 39,450 and 38,052 shares issued as of February 28, 2014 and November 30, 2013, respectively
|
39
|
|
|
38
|
|
||
Additional paid-in capital
|
364,319
|
|
|
286,329
|
|
||
Treasury stock, 843 and 842 shares as of February 28, 2014 and November 30, 2013, respectively
|
(27,522
|
)
|
|
(27,450
|
)
|
||
Accumulated other comprehensive income
|
17,092
|
|
|
19,168
|
|
||
Retained earnings
|
1,171,554
|
|
|
1,133,137
|
|
||
Total SYNNEX Corporation stockholders’ equity
|
1,525,482
|
|
|
1,411,222
|
|
||
Noncontrolling interest
|
459
|
|
|
419
|
|
||
Total equity
|
1,525,941
|
|
|
1,411,641
|
|
||
Total liabilities and equity
|
$
|
3,928,573
|
|
|
$
|
3,325,889
|
|
|
Three Months Ended
|
||||||
|
February 28, 2014
|
|
February 28, 2013
|
||||
Revenue
|
$
|
3,026,984
|
|
|
$
|
2,460,839
|
|
Cost of revenue
|
(2,820,338
|
)
|
|
(2,304,752
|
)
|
||
Gross profit
|
206,646
|
|
|
156,087
|
|
||
Selling, general and administrative expenses
|
(144,696
|
)
|
|
(100,147
|
)
|
||
Income before non-operating items, income taxes and noncontrolling interest
|
61,950
|
|
|
55,940
|
|
||
Interest expense and finance charges, net
|
(4,498
|
)
|
|
(5,493
|
)
|
||
Other income, net
|
2,968
|
|
|
1,261
|
|
||
Income before income taxes and noncontrolling interest
|
60,420
|
|
|
51,708
|
|
||
Provision for income taxes
|
(21,962
|
)
|
|
(18,317
|
)
|
||
Net income
|
38,458
|
|
|
33,391
|
|
||
Net income attributable to noncontrolling interest
|
(41
|
)
|
|
(22
|
)
|
||
Net income attributable to SYNNEX Corporation
|
$
|
38,417
|
|
|
$
|
33,369
|
|
Earnings per share attributable to SYNNEX Corporation:
|
|
|
|
||||
Basic
|
$
|
1.02
|
|
|
$
|
0.91
|
|
Diluted
|
$
|
1.01
|
|
|
$
|
0.88
|
|
Weighted-average common shares outstanding:
|
|
|
|
||||
Basic
|
37,656
|
|
|
36,663
|
|
||
Diluted
|
38,225
|
|
|
38,030
|
|
|
Three Months Ended
|
||||||
|
February 28, 2014
|
|
February 28, 2013
|
||||
Net income
|
$
|
38,458
|
|
|
$
|
33,391
|
|
Other comprehensive income (loss):
|
|
|
|
||||
Unrealized gains on available-for-sale securities, net of $0 tax for both the three months ended February 28, 2014 and 2013, respectively
|
32
|
|
|
239
|
|
||
|
|
|
|
||||
Cash flow hedging instrument:
|
|
|
|
||||
Change in unrecognized loss, net of $5 and $0 tax for the three months ended February 28, 2014 and 2013, respectively
|
(34
|
)
|
|
—
|
|
||
Net losses reclassified into earnings
|
27
|
|
|
—
|
|
||
|
|
|
|
||||
Foreign currency translation adjustments, net of tax of $522 and $448 for the three months ended February 28, 2014 and 2013, respectively
|
(2,102
|
)
|
|
(10,962
|
)
|
||
|
|
|
|
||||
Other comprehensive loss
|
(2,077
|
)
|
|
(10,723
|
)
|
||
Comprehensive income:
|
36,381
|
|
|
22,668
|
|
||
Comprehensive income attributable to noncontrolling interest
|
(40
|
)
|
|
(14
|
)
|
||
Comprehensive income attributable to SYNNEX Corporation
|
$
|
36,341
|
|
|
$
|
22,654
|
|
|
Three Months Ended
|
||||||
|
February 28, 2014
|
|
February 28, 2013
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
38,458
|
|
|
$
|
33,391
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation expense
|
5,657
|
|
|
4,275
|
|
||
Amortization of intangible assets
|
5,697
|
|
|
1,953
|
|
||
Accretion of convertible notes discount
|
—
|
|
|
1,388
|
|
||
Share-based compensation
|
2,584
|
|
|
2,483
|
|
||
Provision for doubtful accounts
|
1,838
|
|
|
1,699
|
|
||
Tax benefits from employee stock plans
|
1,397
|
|
|
240
|
|
||
Excess tax benefit from share-based compensation
|
(1,333
|
)
|
|
(416
|
)
|
||
(Gains) losses on investments
|
229
|
|
|
(569
|
)
|
||
Changes in assets and liabilities, net of acquisition of businesses:
|
|
|
|
||||
Accounts receivable
|
52,032
|
|
|
176,302
|
|
||
Receivable from related parties
|
(635
|
)
|
|
(43
|
)
|
||
Inventories
|
(136,894
|
)
|
|
(9,023
|
)
|
||
Other assets
|
(16,127
|
)
|
|
(7,200
|
)
|
||
Accounts payable
|
(30,713
|
)
|
|
(147,327
|
)
|
||
Payable to related parties
|
6,040
|
|
|
494
|
|
||
Accrued liabilities
|
39,782
|
|
|
(12,476
|
)
|
||
Deferred liabilities
|
(3,030
|
)
|
|
(4,266
|
)
|
||
Net cash provided by (used in) operating activities
|
(35,018
|
)
|
|
40,905
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchase of trading investments
|
(272
|
)
|
|
(155
|
)
|
||
Proceeds from sale of trading investments
|
1,334
|
|
|
927
|
|
||
Acquisition of businesses, net of cash acquired
|
(390,433
|
)
|
|
(877
|
)
|
||
Purchase of property and equipment
|
(4,293
|
)
|
|
(3,041
|
)
|
||
Loans and deposits to third parties, net of repayments received
|
831
|
|
|
279
|
|
||
Proceeds from sale of equity-method investee
|
—
|
|
|
4,153
|
|
||
Changes in restricted cash
|
4,097
|
|
|
(387
|
)
|
||
Net cash provided by (used in) investing activities
|
(388,736
|
)
|
|
899
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from securitization and revolving line of credit
|
1,126,008
|
|
|
136,735
|
|
||
Payment of securitization and revolving line of credit
|
(907,044
|
)
|
|
(101,967
|
)
|
||
Proceeds from long-term credit facility and term loans
|
225,000
|
|
|
—
|
|
||
Payment of long-term bank loans, capital leases and other borrowings
|
(260
|
)
|
|
(690
|
)
|
||
Excess tax benefit from share-based compensation
|
1,333
|
|
|
416
|
|
||
Increase (decrease) in book overdraft
|
(28,776
|
)
|
|
—
|
|
||
Payment of acquisition-related contingent consideration
|
(400
|
)
|
|
—
|
|
||
Cash paid for repurchase of treasury stock
|
—
|
|
|
(103
|
)
|
||
Proceeds from issuance of common stock, net of taxes paid for settlement of equity awards
|
2,705
|
|
|
1,249
|
|
||
Payment for purchase of shares of subsidiary from noncontrolling interest
|
—
|
|
|
(11,400
|
)
|
||
Net cash provided by financing activities
|
418,566
|
|
|
24,240
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
1,969
|
|
|
2,331
|
|
||
Net increase (decrease) in cash and cash equivalents
|
(3,219
|
)
|
|
68,375
|
|
||
Cash and cash equivalents at beginning of period
|
151,622
|
|
|
163,699
|
|
||
Cash and cash equivalents at end of period
|
$
|
148,403
|
|
|
$
|
232,074
|
|
|
|
|
|
||||
Supplemental disclosure of non-cash investing activities
|
|
|
|
||||
Fair value of common stock issued for acquisition of business
|
$
|
71,103
|
|
|
$
|
—
|
|
|
As of
|
||||||
|
February 28, 2014
|
|
November 30, 2013
|
||||
Related to borrowing arrangements and others:
|
|
|
|
||||
Other current assets
|
$
|
18,232
|
|
|
$
|
22,349
|
|
Related to long-term projects:
|
|
|
|
||||
Other assets
|
1,858
|
|
|
1,865
|
|
||
Total restricted cash
|
$
|
20,090
|
|
|
$
|
24,214
|
|
Preliminary purchase consideration:
|
Fair Value
|
||
Cash payment
|
$
|
321,000
|
|
Stock consideration
|
71,103
|
|
|
Preliminary fair value of stock awards assumed
|
1,987
|
|
|
|
$
|
394,090
|
|
Preliminary purchase price allocation:
|
Fair Value
|
||
Accounts receivable
|
$
|
24,788
|
|
Other current assets
|
23,080
|
|
|
Property, plant and equipment
|
36,974
|
|
|
Goodwill
|
186,266
|
|
|
Intangible assets
|
180,649
|
|
|
Other assets
|
26,123
|
|
|
Accounts payable
|
(20,326
|
)
|
|
Accrued liabilities
|
(24,978
|
)
|
|
Deferred tax liabilities, non-current
|
(16,426
|
)
|
|
Other long-term liabilities
|
(22,060
|
)
|
|
|
$
|
394,090
|
|
|
|
Fair Value
|
|
Useful Life
|
||
Customer contracts
|
|
$
|
168,449
|
|
|
10 years
|
Technology
|
|
7,200
|
|
|
3-10 years
|
|
Trade names
|
|
5,000
|
|
|
5-10 years
|
|
Total intangibles acquired
|
|
$
|
180,649
|
|
|
|
|
|
Three Months Ended
|
||||||
|
|
February 28, 2014
|
|
February 28, 2013
|
||||
Revenue
|
|
$
|
3,221,784
|
|
|
$
|
2,791,339
|
|
Net income attributable to SYNNEX Corporation
|
|
42,512
|
|
|
29,662
|
|
||
Net income from continuing operations per share - basic
|
|
$
|
1.10
|
|
|
$
|
0.78
|
|
Net income from continuing operations per share - diluted
|
|
$
|
1.09
|
|
|
$
|
0.75
|
|
|
Three Months Ended
|
||||||||||||
|
February 28, 2014
|
|
February 28, 2013
|
||||||||||
|
Shares awarded
|
|
Fair value of grants
|
|
Shares awarded
|
|
Fair value of grants
|
||||||
Restricted stock awards
|
80
|
|
|
$
|
4,544
|
|
|
2
|
|
|
$
|
54
|
|
Restricted stock units
|
46
|
|
|
2,704
|
|
|
98
|
|
|
3,467
|
|
||
|
126
|
|
|
$
|
7,248
|
|
|
100
|
|
|
$
|
3,521
|
|
|
As of
|
||||||
|
February 28, 2014
|
|
November 30, 2013
|
||||
Short-term investments:
|
|
|
|
||||
Trading securities
|
$
|
3,741
|
|
|
$
|
4,728
|
|
Held-to-maturity securities
|
8,673
|
|
|
8,753
|
|
||
Cost method investments
|
1,593
|
|
|
1,653
|
|
||
|
$
|
14,007
|
|
|
$
|
15,134
|
|
|
As of
|
||||||
|
February 28, 2014
|
|
November 30, 2013
|
||||
Accounts receivable, net:
|
|
|
|
||||
Accounts receivable
|
$
|
1,628,303
|
|
|
$
|
1,681,917
|
|
Less: Allowance for doubtful accounts
|
(14,621
|
)
|
|
(14,010
|
)
|
||
Less: Allowance for sales returns
|
(56,689
|
)
|
|
(74,716
|
)
|
||
|
$
|
1,556,993
|
|
|
$
|
1,593,191
|
|
|
As of
|
||||||
|
February 28, 2014
|
|
November 30, 2013
|
||||
Property and equipment, net:
|
|
|
|
||||
Land
|
$
|
22,406
|
|
|
$
|
22,665
|
|
Equipment and computers
|
125,914
|
|
|
107,528
|
|
||
Furniture and fixtures
|
35,288
|
|
|
21,480
|
|
||
Buildings, building improvements and leasehold improvements
|
122,327
|
|
|
113,777
|
|
||
Construction in progress
|
933
|
|
|
1,621
|
|
||
Total property and equipment, gross
|
306,868
|
|
|
267,071
|
|
||
Less: Accumulated depreciation
|
(138,360
|
)
|
|
(133,822
|
)
|
||
|
$
|
168,508
|
|
|
$
|
133,249
|
|
Goodwill:
|
Technology Solutions
|
|
Concentrix
|
|
Total
|
||||||
Balance at the beginning of the period
|
$
|
108,218
|
|
|
$
|
80,317
|
|
|
$
|
188,535
|
|
Additions from acquisitions, net of adjustments
|
—
|
|
|
186,266
|
|
|
186,266
|
|
|||
Foreign exchange translation
|
(1,869
|
)
|
|
3,470
|
|
|
1,601
|
|
|||
Balance at the end of the period
|
$
|
106,349
|
|
|
$
|
270,053
|
|
|
$
|
376,402
|
|
Intangible assets, net
|
As of February 28, 2014
|
|
As of November 30, 2013
|
||||||||||||||||||||
|
Gross
Amounts |
|
Accumulated
Amortization |
|
Net
Amounts |
|
Gross
Amounts |
|
Accumulated
Amortization |
|
Net
Amounts |
||||||||||||
Vendor lists
|
$
|
36,815
|
|
|
$
|
(30,564
|
)
|
|
$
|
6,251
|
|
|
$
|
36,815
|
|
|
$
|
(30,180
|
)
|
|
$
|
6,635
|
|
Customer relationships
|
222,405
|
|
|
(40,147
|
)
|
|
182,258
|
|
|
52,179
|
|
|
(35,379
|
)
|
|
16,800
|
|
||||||
Technology
|
7,200
|
|
|
(154
|
)
|
|
7,046
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other intangible assets
|
9,435
|
|
|
(4,448
|
)
|
|
4,987
|
|
|
4,857
|
|
|
(4,520
|
)
|
|
337
|
|
||||||
|
$
|
275,855
|
|
|
$
|
(75,313
|
)
|
|
$
|
200,542
|
|
|
$
|
93,851
|
|
|
$
|
(70,079
|
)
|
|
$
|
23,772
|
|
Fiscal Years Ending November 30,
|
|
||
2014
|
$
|
43,994
|
|
2015
|
42,093
|
|
|
2016
|
33,562
|
|
|
2017
|
25,401
|
|
|
2018
|
18,422
|
|
|
thereafter
|
37,070
|
|
|
Total
|
$
|
200,542
|
|
|
|
Losses on cash flow hedges, net of taxes
|
|
Unrealized gains on available-for-sale securities, net of taxes
|
|
Unrecognized pension and post-retirement benefit costs, net of taxes
|
|
Foreign currency translation adjustment, net of taxes
|
|
Total
|
||||||||||
Beginning balance
|
|
$
|
—
|
|
|
$
|
543
|
|
|
$
|
(365
|
)
|
|
$
|
18,990
|
|
|
$
|
19,168
|
|
Other comprehensive income (loss) before reclassifications
|
|
(34
|
)
|
|
33
|
|
|
—
|
|
|
(2,102
|
)
|
|
(2,103
|
)
|
|||||
Net loss reclassified into earnings
|
|
27
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|||||
Ending balance
|
|
$
|
(7
|
)
|
|
$
|
576
|
|
|
$
|
(365
|
)
|
|
$
|
16,888
|
|
|
$
|
17,092
|
|
|
As of
|
||||||||||||||||||||||
|
February 28, 2014
|
|
November 30, 2013
|
||||||||||||||||||||
|
Cost Basis
|
|
Unrealized Gains
|
|
Carrying
Value |
|
Cost Basis
|
|
Unrealized Gains
|
|
Carrying
Value |
||||||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trading securities
|
$
|
2,833
|
|
|
$
|
908
|
|
|
$
|
3,741
|
|
|
$
|
3,857
|
|
|
$
|
871
|
|
|
$
|
4,728
|
|
Held-to-maturity investments
|
8,673
|
|
|
—
|
|
|
8,673
|
|
|
8,753
|
|
|
—
|
|
|
8,753
|
|
||||||
Cost method securities
|
1,593
|
|
|
—
|
|
|
1,593
|
|
|
1,653
|
|
|
—
|
|
|
1,653
|
|
||||||
|
$
|
13,099
|
|
|
$
|
908
|
|
|
$
|
14,007
|
|
|
$
|
14,263
|
|
|
$
|
871
|
|
|
$
|
15,134
|
|
Long-term investments in other assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Available-for-sale securities
|
$
|
961
|
|
|
$
|
412
|
|
|
$
|
1,373
|
|
|
$
|
909
|
|
|
$
|
366
|
|
|
$
|
1,275
|
|
Cost-method investments
|
4,968
|
|
|
—
|
|
|
4,968
|
|
|
4,981
|
|
|
—
|
|
|
4,981
|
|
|
Three Months Ended
|
||||||
|
February 28, 2014
|
|
February 28, 2013
|
||||
Gain on trading investments
|
$
|
59
|
|
|
$
|
569
|
|
|
As of February 28, 2014
|
|
As of November 30, 2013
|
||||||||||||||||||||||||||||
|
Total
|
|
Fair value measurement category
|
|
Total
|
|
Fair value measurement category
|
||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents
|
$
|
25,867
|
|
|
$
|
25,867
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,779
|
|
|
$
|
28,779
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Trading securities
|
3,741
|
|
|
3,741
|
|
|
—
|
|
|
—
|
|
|
4,728
|
|
|
4,728
|
|
|
—
|
|
|
—
|
|
||||||||
Available-for-sale securities in other assets
|
1,373
|
|
|
1,373
|
|
|
—
|
|
|
—
|
|
|
1,275
|
|
|
1,275
|
|
|
—
|
|
|
—
|
|
||||||||
Forward foreign currency exchange contracts
|
1,540
|
|
|
—
|
|
|
1,540
|
|
|
—
|
|
|
2,386
|
|
|
—
|
|
|
2,386
|
|
|
—
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Forward foreign currency exchange contracts
|
$
|
584
|
|
|
$
|
—
|
|
|
$
|
584
|
|
|
$
|
—
|
|
|
$
|
80
|
|
|
$
|
—
|
|
|
$
|
80
|
|
|
$
|
—
|
|
Acquisition-related contingent consideration
|
2,527
|
|
|
—
|
|
|
—
|
|
|
2,527
|
|
|
2,996
|
|
|
—
|
|
|
—
|
|
|
2,996
|
|
|
Three Months Ended
|
||||||
|
February 28, 2014
|
|
February 28, 2013
|
||||
Net sales financed
|
$
|
281,990
|
|
|
$
|
186,335
|
|
Flooring fees
(1)
|
1,569
|
|
|
1,227
|
|
(1)
|
Flooring fees are included within “Interest expense and finance charges, net.”
|
|
As of
|
||||||
|
February 28, 2014
|
|
November 30, 2013
|
||||
SYNNEX U.S. securitization
|
$
|
380,000
|
|
|
$
|
144,000
|
|
SYNNEX U.S. credit agreement
|
225,000
|
|
|
—
|
|
||
SYNNEX Canada term loan
|
6,947
|
|
|
7,419
|
|
||
Infotec Japan credit facility
|
120,849
|
|
|
136,679
|
|
||
Other borrowings and capital leases
|
29,911
|
|
|
29,830
|
|
||
Total borrowings
|
762,707
|
|
|
317,928
|
|
||
Less: Current portion
|
(480,881
|
)
|
|
(252,523
|
)
|
||
Non-current portion
|
$
|
281,826
|
|
|
$
|
65,405
|
|
Fiscal Years Ending November 30,
|
|
||
2014
|
$
|
480,674
|
|
2015
|
12,052
|
|
|
2016
|
23,282
|
|
|
2017
|
82,258
|
|
|
2018
|
161,164
|
|
|
Thereafter
|
3,277
|
|
|
|
$
|
762,707
|
|
|
Three Months Ended
|
||||||
|
February 28, 2014
|
|
February 28, 2013
|
||||
Numerator:
|
|
|
|
||||
Net income attributable to SYNNEX Corporation
|
$
|
38,417
|
|
|
$
|
33,369
|
|
|
|
|
|
||||
Denominator:
|
|
|
|
||||
Weighted-average common shares - basic
|
37,656
|
|
|
36,663
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Stock options, restricted stock awards and restricted stock units
|
569
|
|
|
520
|
|
||
Conversion spread of convertible debt
|
—
|
|
|
847
|
|
||
Weighted-average common shares - diluted
|
38,225
|
|
|
38,030
|
|
||
|
|
|
|
||||
Earnings per share attributable to SYNNEX Corporation:
|
|
|
|
||||
Basic
|
$
|
1.02
|
|
|
$
|
0.91
|
|
Diluted
|
$
|
1.01
|
|
|
$
|
0.88
|
|
|
Technology Solutions
|
|
Concentrix
|
|
Inter-Segment
Elimination
|
|
Consolidated
|
||||||||
Three months ended February 28, 2014
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
2,902,907
|
|
|
$
|
126,965
|
|
|
$
|
(2,888
|
)
|
|
$
|
3,026,984
|
|
Income (loss) from operations before non-operating items, income taxes and noncontrolling interest
|
63,531
|
|
|
(1,779
|
)
|
|
198
|
|
|
61,950
|
|
||||
Three months ended February 28, 2013
|
|
|
|
|
|
|
|
||||||||
Revenue
|
2,418,916
|
|
|
44,350
|
|
|
(2,427
|
)
|
|
2,460,839
|
|
||||
Income from operations before non-operating items, income taxes and noncontrolling interest
|
53,536
|
|
|
2,424
|
|
|
(20
|
)
|
|
55,940
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total assets as of February 28, 2014
|
$
|
3,750,868
|
|
|
$
|
777,417
|
|
|
$
|
(599,712
|
)
|
|
$
|
3,928,573
|
|
Total assets as of November 30, 2013
|
3,271,804
|
|
|
273,135
|
|
|
(219,050
|
)
|
|
3,325,889
|
|
|
Three Months Ended
|
||||||
|
February 28, 2014
|
|
February 28, 2013
|
||||
Revenue:
|
|
|
|
||||
North America
|
$
|
2,580,253
|
|
|
$
|
2,129,513
|
|
Asia-Pacific
|
391,824
|
|
|
311,624
|
|
||
Other
|
54,907
|
|
|
19,702
|
|
||
|
$
|
3,026,984
|
|
|
$
|
2,460,839
|
|
|
As of
|
||||||
|
February 28, 2014
|
|
November 30, 2013
|
||||
Property and equipment, net:
|
|
|
|
||||
North America
|
$
|
99,099
|
|
|
$
|
95,344
|
|
Asia-Pacific
|
49,863
|
|
|
19,853
|
|
||
Other
|
19,546
|
|
|
18,052
|
|
||
|
$
|
168,508
|
|
|
$
|
133,249
|
|
|
As of February 28, 2014
|
|
MiTAC Holdings
(1)
|
5,552
|
|
Synnex Technology International Corp.
(2)
|
4,283
|
|
Total
|
9,835
|
|
(1)
|
Shares are held via Silver Star Developments Ltd., a wholly-owned subsidiary of MiTAC Holdings. Excludes
442
shares directly held by Matthew Miau.
|
(2)
|
Synnex Technology International Corp. ("Synnex Technology International") is a separate entity from the Company and is a publicly-traded corporation in Taiwan. Shares are held via Peer Development Ltd., a wholly-owned subsidiary of Synnex Technology International. MiTAC Holdings owns a noncontrolling interest of
8.7%
in MiTAC Incorporated, a privately-held Taiwanese company, which in turn holds a noncontrolling interest of
13.6%
in Synnex Technology International.
|
|
Three Months Ended
|
||||||
|
February 28, 2014
|
|
February 28, 2013
|
||||
Service cost
|
$
|
158
|
|
|
$
|
161
|
|
Interest cost
|
35
|
|
|
41
|
|
||
Expected return on plan assets
|
(17
|
)
|
|
(16
|
)
|
||
Net periodic pension costs
|
$
|
176
|
|
|
$
|
186
|
|
|
|
Three Months Ended February 28, 2014
|
|
Three Months Ended February 28, 2013
|
||||||||||||||||||||
|
|
Attributable to
SYNNEX
Corporation
|
|
Attributable to
Noncontrolling
interest
|
|
Total Equity
|
|
Attributable
to SYNNEX
Corporation
|
|
Attributable to
Noncontrolling
interest
|
|
Total Equity
|
||||||||||||
Beginning balance of equity:
|
|
$
|
1,411,222
|
|
|
$
|
419
|
|
|
$
|
1,411,641
|
|
|
$
|
1,319,023
|
|
|
$
|
332
|
|
|
$
|
1,319,355
|
|
Issuance of common stock on exercise of options
|
|
2,449
|
|
|
—
|
|
|
2,449
|
|
|
1,041
|
|
|
—
|
|
|
1,041
|
|
||||||
Issuance of common stock for employee stock purchase plan
|
|
328
|
|
|
—
|
|
|
328
|
|
|
308
|
|
|
—
|
|
|
308
|
|
||||||
Tax benefit from employee stock plans
|
|
1,397
|
|
|
—
|
|
|
1,397
|
|
|
240
|
|
|
—
|
|
|
240
|
|
||||||
Taxes paid for the settlement of equity awards
|
|
(72
|
)
|
|
—
|
|
|
(72
|
)
|
|
(99
|
)
|
|
—
|
|
|
(99
|
)
|
||||||
Shares and employee stock awards issued for acquisition of IBM customer care business
|
|
71,233
|
|
|
—
|
|
|
71,233
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
|
2,584
|
|
|
—
|
|
|
2,584
|
|
|
2,483
|
|
|
—
|
|
|
2,483
|
|
||||||
Repurchase of treasury stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(103
|
)
|
|
—
|
|
|
(103
|
)
|
||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
|
38,417
|
|
|
41
|
|
|
38,458
|
|
|
33,369
|
|
|
22
|
|
|
33,391
|
|
||||||
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Changes in unrealized gains (losses) on available-for-sale securities
|
|
33
|
|
|
(1
|
)
|
|
32
|
|
|
239
|
|
|
—
|
|
|
239
|
|
||||||
Net change in unrealized loss on cash flow hedge
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign currency translation adjustments
|
|
(2,102
|
)
|
|
—
|
|
|
(2,102
|
)
|
|
(10,954
|
)
|
|
(8
|
)
|
|
(10,962
|
)
|
||||||
Total other comprehensive income
|
|
(2,076
|
)
|
|
(1
|
)
|
|
(2,077
|
)
|
|
(10,715
|
)
|
|
(8
|
)
|
|
(10,723
|
)
|
||||||
Total comprehensive income
|
|
36,341
|
|
|
40
|
|
|
36,381
|
|
|
22,654
|
|
|
14
|
|
|
22,668
|
|
||||||
Ending balance of equity:
|
|
$
|
1,525,482
|
|
|
$
|
459
|
|
|
$
|
1,525,941
|
|
|
$
|
1,345,547
|
|
|
$
|
346
|
|
|
$
|
1,345,893
|
|
Statements of Operations Data:
|
Three Months Ended
|
||||
|
February 28, 2014
|
|
February 28, 2013
|
||
Revenue
|
100.00
|
%
|
|
100.00
|
%
|
Cost of revenue
|
(93.17
|
)
|
|
(93.66
|
)
|
Gross profit
|
6.83
|
|
|
6.34
|
|
Selling, general and administrative expenses
|
(4.78
|
)
|
|
(4.07
|
)
|
Income from operations before non-operating items, income taxes and noncontrolling interest
|
2.05
|
|
|
2.27
|
|
Interest expense and finance charges, net
|
(0.15
|
)
|
|
(0.22
|
)
|
Other income, net
|
0.10
|
|
|
0.05
|
|
Income from operations before income taxes and noncontrolling interest
|
2.00
|
|
|
2.10
|
|
Provision for income taxes
|
(0.73
|
)
|
|
(0.74
|
)
|
Net income
|
1.27
|
|
|
1.36
|
|
Net income attributable to noncontrolling interest
|
0.00
|
|
|
0.00
|
|
Net income attributable to SYNNEX Corporation
|
1.27
|
%
|
|
1.36
|
%
|
|
Three Months Ended
|
|
|
|||||||
|
February 28, 2014
|
|
February 28, 2013
|
|
Percent Change
|
|||||
|
(in thousands)
|
|
|
|||||||
Revenue
|
$
|
3,026,984
|
|
|
$
|
2,460,839
|
|
|
23.0
|
%
|
Technology Solutions revenue
|
2,902,907
|
|
|
2,418,916
|
|
|
20.0
|
%
|
||
Concentrix revenue
|
126,965
|
|
|
44,350
|
|
|
186.3
|
%
|
||
Inter-segment elimination
|
(2,888
|
)
|
|
(2,427
|
)
|
|
19.0
|
%
|
|
Three Months Ended
|
|
|
|||||||
|
February 28, 2014
|
|
February 28, 2013
|
|
Percent Change
|
|||||
|
(in thousands)
|
|
|
|||||||
Gross profit
|
$
|
206,646
|
|
|
$
|
156,087
|
|
|
32.4
|
%
|
Percentage of revenue
|
6.83
|
%
|
|
6.34
|
%
|
|
|
|
Three Months Ended
|
|
|
|||||||
|
February 28, 2014
|
|
February 28, 2013
|
|
Percent Change
|
|||||
|
(in thousands)
|
|
||||||||
Selling, general and administrative expenses
|
$
|
144,696
|
|
|
$
|
100,147
|
|
|
44.5
|
%
|
Percentage of revenue
|
4.78
|
%
|
|
4.07
|
%
|
|
|
|
Three Months Ended
|
|
|
|||||||
|
February 28, 2014
|
|
February 28, 2013
|
|
Percent Change
|
|||||
|
(in thousands)
|
|
|
|||||||
Interest expense and finance charges, net
|
$
|
4,498
|
|
|
$
|
5,493
|
|
|
(18.1
|
)%
|
Percentage of revenue
|
0.15
|
%
|
|
0.22
|
%
|
|
|
|
Three Months Ended
|
|
|
|||||||
|
February 28, 2014
|
|
February 28, 2013
|
|
Percent Change
|
|||||
|
(in thousands)
|
|
|
|||||||
Other income, net
|
$
|
2,968
|
|
|
$
|
1,261
|
|
|
135.4
|
%
|
Percentage of revenue
|
0.10
|
%
|
|
0.05
|
%
|
|
|
|
As of February 28, 2014
|
|
|
(in thousands)
|
|
MiTAC Holdings
(1)
|
5,552
|
|
Synnex Technology International Corp.
(2)
|
4,283
|
|
Total
|
9,835
|
|
(1)
|
Shares are held via Silver Star Developments Ltd., a wholly-owned subsidiary of MiTAC Holdings. Excludes
442
thousand shares directly held by Matthew Miau.
|
(2)
|
Synnex Technology International Corp., or Synnex Technology International, is a separate entity from us and is a publicly-traded corporation in Taiwan. Shares are held via Peer Development Ltd., a wholly-owned subsidiary of Synnex Technology International. MiTAC Holdings owns a noncontrolling interest of
8.7%
in MiTAC Incorporated, a privately-held Taiwanese company, which in turn holds a noncontrolling interest of
13.6%
in Synnex Technology International.
|
•
|
the current market price of our common stock may reflect a market assumption that the subsequent closings of the acquisition will occur, and a failure to successfully integrate and complete successive closings of the acquisition could result in a negative perception by the market of us generally and a resulting decline in the market price of our common stock;
|
•
|
we have incurred substantial transaction costs relating to the acquisition (including significant legal, accounting and consulting fees), and these substantial costs are payable by us whether or not the integration of the remainder of the acquisition is successful ;
|
•
|
there may be a substantial disruption to our business and a distraction of our management and employees from day-to-day operations because matters related to the remainder of the acquisition (including integration planning) may require substantial commitments of time and resources, which could otherwise have been devoted to other opportunities that could have been beneficial;
|
•
|
the diversion of management time required by the remainder of the acquisition could also adversely affect our results of operations and lead to the loss of important customers; and
|
•
|
the loss of existing key and other employees could adversely affect our operations and business results.
|
•
|
challenges associated with minimizing the diversion of management attention from ongoing business concerns;
|
•
|
coordinating geographically separate organizations which may be subject to additional complications resulting from being geographically distant from other of our operations;
|
•
|
coordinating and combining international operations, relationships, and facilities, and eliminating duplicative operations;
|
•
|
retaining key employees and maintaining employee morale, particularly in areas where we do not currently have personnel;
|
•
|
retaining and preserving existing customer relationships and completing the successful novation of customer contracts on favorable and comparable terms;
|
•
|
possible attrition of customer relationships resulting from the perceived loss of a globally recognized brand name service provider;
|
•
|
unanticipated changes in general business or market conditions that might interfere with our ability to carry out all of our integration plans;
|
•
|
unanticipated issues in integrating information, communications and other systems, and
|
•
|
issues not discovered in our due diligence process.
|
•
|
the impact of the business acquisitions and dispositions we make;
|
•
|
general economic conditions and level of IT and CE spending;
|
•
|
the loss or consolidation of one or more of our significant OEM suppliers or customers;
|
•
|
market acceptance, product mix, quality, pricing, availability and useful life of our products;
|
•
|
competitive conditions in our industry;
|
•
|
pricing, margin and other terms with our OEM suppliers;
|
•
|
decline in inventory value as a result of product obsolescence and market acceptance;
|
•
|
variations in our levels of excess inventory, vendor reserves and doubtful accounts;
|
•
|
fluctuations in rates in the currencies in which we transact;
|
•
|
changes in the terms of OEM supplier-inventory protections, such as price protection and return rights; and
|
•
|
the expansion of our design and integration sales and operations, globally.
|
•
|
a government controlled foreign exchange rate and limitations on the convertibility of the Chinese Renminbi;
|
•
|
extensive government regulation;
|
•
|
changing governmental policies relating to tax benefits available to foreign-owned businesses;
|
•
|
the telecommunications infrastructure;
|
•
|
a relatively uncertain legal system; and
|
•
|
uncertainties related to continued economic and social reform.
|
•
|
changes in income before taxes in various jurisdictions in which we operate that have differing statutory tax rates;
|
•
|
changing tax laws, regulations, and/or interpretations of such tax laws in multiple jurisdictions;
|
•
|
effect of tax rate on accounting for acquisitions and dispositions;
|
•
|
issues arising from tax audit or examinations and any related interest or penalties; and
|
•
|
uncertainty in obtaining tax holiday extensions or expiration or loss of tax holidays in various jurisdictions.
|
•
|
difficulty in successfully integrating acquired operations, IT systems, customers, and OEM supplier relationships, products and services and businesses with our operations;
|
•
|
loss of key employees of acquired operations or inability to hire key employees necessary for our expansion;
|
•
|
diversion of our capital and management attention away from other business issues;
|
•
|
increase in our expenses and working capital requirements;
|
•
|
in the case of acquisitions that we may make outside of the United States, difficulty in operating in foreign countries and over significant geographical distances; and
|
•
|
other financial risks, such as potential liabilities of the businesses we acquire.
|
•
|
incur additional indebtedness;
|
•
|
pay dividends or make certain other restricted payments;
|
•
|
consummate certain asset sales or acquisitions;
|
•
|
enter into certain transactions with affiliates; and
|
•
|
merge, consolidate or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of our assets.
|
•
|
our debt holders could declare all outstanding principal and interest to be due and payable;
|
•
|
the lenders under our credit agreements could terminate their commitments to loan us money and, in the case of our secured credit agreements, foreclose against the assets securing their borrowings;
|
•
|
we could be forced to raise additional capital through the issuance of additional, potentially dilutive, securities; and
|
•
|
we could be forced into bankruptcy or liquidation, which is likely to result in delays in the payment of our indebtedness and in the exercise of enforcement remedies related to our indebtedness.
|
•
|
political or economic instability;
|
•
|
extensive governmental regulation;
|
•
|
changes in import/export duties;
|
•
|
trade restrictions;
|
•
|
compliance with the Foreign Corrupt Practices Act, U.K. bribery laws and similar laws;
|
•
|
difficulties and costs of staffing and managing operations in certain foreign countries;
|
•
|
work stoppages or other changes in labor conditions;
|
•
|
difficulties in collecting of accounts receivable on a timely basis or at all;
|
•
|
taxes; and
|
•
|
seasonal reductions in business activity in some parts of the world.
|
Exhibit
Number
|
|
Description of Document
|
|
|
|
10.1#
|
|
Promotion Letter to Christopher Caldwell dated Febru
ary 1, 2014
|
|
|
|
10.2#
|
|
Form of Incentive Award Agreements Related to the SYNNEX Corporation 2013 Stock Incentive Plan.
|
|
|
|
31.1
|
|
Rule 13a-14(a) Certification of Chief Executive Officer.
|
|
|
|
31.2
|
|
Rule 13a-14(a) Certification of Chief Financial Officer.
|
|
|
|
32.1*
|
|
Statement of the Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
By:
|
|
/s/ Kevin M. Murai
|
|
|
|
Kevin M. Murai
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Duly authorized officer and principal executive officer)
|
|
By:
|
|
/s/ Marshall W. Witt
|
|
|
|
Marshall W. Witt
|
|
|
|
Chief Financial Officer
|
|
|
|
(Duly authorized officer and principal financial officer)
|
|
Exhibit
Number
|
|
Description of Document
|
|
|
|
10.1#
|
|
Promotion Letter to Christopher Caldwell dated F
ebruary 1, 2014
|
|
|
|
10.2#
|
|
Form of incentive award agreements related to the SYNNEX Corporation 2013 Stock Incentive Plan.
|
|
|
|
31.1
|
|
Rule 13a-14(a) Certification of Chief Executive Officer.
|
|
|
|
31.2
|
|
Rule 13a-14(a) Certification of Chief Financial Officer.
|
|
|
|
32.1*
|
|
Statement of the Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
/s/ Christopher Caldwell
|
|
2/3/2014
|
Signature
|
|
Date
|
Vesting Schedule:
|
[Insert applicable vesting schedule.]
|
Payment For Shares
|
No cash payment is required for the Shares you receive. You are receiving the Shares in consideration for Services rendered by you.
|
|
|
Governing Plan
|
The Shares that you are receiving are granted pursuant and subject in all respects to the applicable provisions of the SYNNEX Corporation 2013 Stock Incentive Plan (the “Plan”), which is incorporated herein by reference. Terms not otherwise defined in this Agreement have meanings ascribed to them in the Plan.
|
|
|
Vesting
|
The Shares that you are receiving will vest in installments, as shown in the Notice of Restricted Stock Award.
|
|
|
|
No additional Shares vest after your Service as an Employee or a Consultant has terminated for any reason.
|
|
|
Shares Restricted
|
Unvested Shares will be considered “Restricted Shares.” Except to the extent permitted by the Committee, you may not sell, transfer, assign, pledge or otherwise dispose of Restricted Shares. You may transfer Restricted Shares to your spouse, children or grandchildren or to a trust established by you for the benefit of yourself or your spouse, children or grandchildren. However, a transferee of Restricted Shares must agree in writing on a form prescribed by the Company to be bound by all provisions of this Agreement.
|
|
|
Forfeiture
|
If your Service terminates for any reason, then your Shares will be forfeited to the extent that they have not vested before the termination date and do not vest as a result of termination. This means that the Restricted Shares will immediately revert to the Company. You receive no payment for Restricted Shares that are forfeited. The Company determines when your Service terminates for this purpose and all purposes under the Plan and its determinations are conclusive and binding on all persons.
|
|
|
Leaves Of Absence
|
For purposes of this Award, your Service does not terminate when you go on a military leave, a sick leave or another
bona fide
leave of absence, if the leave was approved by the Company in writing and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work.
|
|
|
|
If you go on a leave of absence, then the vesting schedule specified in the Notice of Restricted Stock Award may be adjusted in accordance with the Company’s leave of absence policy or the terms of your leave. If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Restricted Stock Award may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule.
|
|
|
Stock Certificates
|
The certificates for the Restricted Shares have stamped on them a special legend referring to the forfeiture restrictions. In addition to or in lieu of imposing the legend, the Company may hold the certificates in escrow. As your vested percentage increases, you may request (at reasonable intervals) that the Company release to you a non-legended certificate for your vested Shares.
|
|
|
Stockholder Rights
|
During the period of time between the date of grant and the date the Restricted Shares become vested, you shall have all the rights of a stockholder with respect to the Restricted Shares except for the right to transfer the Restricted Shares, as set forth above. Accordingly, you shall have the right to vote the Restricted Shares and to receive any cash dividends paid with respect to the Restricted Shares.
|
|
|
Withholding Taxes
|
Regardless of any action the Company or your employer (the “Employer”) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or your Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the shares received under this Award, including the award or vesting of such shares, the subsequent sale of shares under this Award and the receipt of any dividends; and (2) do not commit to structure the terms of the award to reduce or eliminate your liability for Tax-Related Items.
No stock certificates will be released to you, unless you have paid or made adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding and payment on account obligations of the Company and/or your Employer. In this regard, you authorize the Company and/or your Employer to withhold all applicable Tax-Related Items legally payable by you from your wages or other cash compensation paid to you by the Company and/or your Employer. With the Company’s consent, these arrangements may also include, if permissible under local law, a) withholding shares that otherwise would be delivered to you when they vest having a Fair Market Value equal to the amount necessary to satisfy the minimum statutory withholding amount , b) having the Company withhold taxes from the proceeds of the sale of the Shares, either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization), or (c) any other arrangement approved by the Company. The fair market value of these shares, determined as of the date when taxes otherwise would have been withheld in cash, will be applied as a credit against the withholding taxes. Finally, you shall pay to the Company or your Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold as a result of your participation in the Plan or your acquisition of shares that cannot be satisfied by the means previously described. The Company may refuse to deliver the shares if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section.
|
|
|
Restrictions On Resale
|
You agree not to sell any Shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify.
|
|
|
No Retention Rights
|
Neither your Award nor this Agreement gives you the right to be employed or retained by the Company or a subsidiary of the Company in any capacity. The Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause.
|
|
|
Adjustments
|
In the event of a stock split, a stock dividend or a similar change in Company Shares, or an extraordinary dividend, or a merger or a reorganization of the Company, the forfeiture provisions described above will apply to all new, substitute or additional securities or other assets to which you are entitled by reason of your ownership of the Shares.
|
|
|
Successors and Assigns
|
Except as otherwise provided in the Plan or this Agreement, every term of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, legal representatives, successors, transferees and assigns.
|
|
|
Notice
|
Any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon the earliest of personal delivery, receipt or the third full day following mailing with postage and fees prepaid, addressed to the other party hereto at the address last known in the Company’s records or at such other address as such party may designate by 10 days’ advance written notice to the other party hereto.
|
|
|
Applicable Law
|
This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions).
|
|
|
Miscellaneous
|
You understand and acknowledge that (i) the Plan is entirely discretionary, (ii) the Company and your employer have reserved the right to amend, suspend or terminate the Plan at any time, (iii) the grant of your Award does not in any way create any contractual or other right to receive additional grants of awards (or benefits in lieu of awards) at any time or in any amount and (iv) all determinations with respect to any additional grants, including (without limitation) the times when awards will be granted, the number of shares offered, the purchase price and the vesting schedule, will be at the sole discretion of the Company.
The value of this Award shall be an extraordinary item of compensation outside the scope of your employment contract, if any, and shall not be considered a part of your normal or expected compensation for purposes of calculating severance, resignation, redundancy or end-of-service payments, bonuses, long-service awards, pension or retirement benefits or similar payments.
You understand and acknowledge that participation in the Plan ceases upon termination of your Service for any reason, except as may explicitly be provided otherwise in the Plan or this Agreement.
You hereby authorize and direct your employer to disclose to the Company or any Subsidiary any information regarding your employment, the nature and amount of your compensation and the fact and conditions of your participation in the Plan, as your employer deems necessary or appropriate to facilitate the administration of the Plan.
You consent to the collection, use and transfer of personal data as described in this subsection. You understand and acknowledge that the Company, your employer and the Company’s other Subsidiaries hold certain personal information regarding you for the purpose of managing and administering the Plan, including (without limitation) your name, home address, telephone number, date of birth, social insurance number, salary, nationality, job title, any shares or directorships held in the Company and details of all awards or any other entitlements to shares awarded, canceled, exercised, vested, unvested or outstanding in the your favor (the “Data”). You further understand and acknowledge that the Company and/or its Subsidiaries will transfer Data among themselves as necessary for the purpose of implementation, administration and management of your participation in the Plan and that the Company and/or any Subsidiary may each further transfer Data to any third party assisting the Company in the implementation, administration and management of the Plan. You understand and acknowledge that the recipients of Data may be located in the United States or elsewhere. You authorize such recipients to receive, possess, use, retain and transfer Data, in electronic or other form, for the purpose of administering your participation in the Plan, including a transfer to any broker or other third party with whom you elect to deposit shares acquired under the Plan of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares on your behalf. You may, at any time, view the Data, require any necessary modifications of Data or withdraw the consents set forth in this subsection by contacting the Human Resources Department of the Company in writing.
|
|
|
The Plan and Other Agreements
|
The text of the Plan is incorporated in this Agreement by reference. All capitalized terms in this Agreement shall have the meanings assigned to them in the Plan. This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Award. Any prior agreements, commitments or negotiations concerning this Award are superseded. This Agreement may be amended by the Committee without your consent; however, if any such amendment would materially impair your rights or obligations under the Agreement, this Agreement may be amended only by another written agreement, signed by you and the Company.
|
Vesting Schedule
:
|
The Restricted Stock Units will vest on the following Vesting Dates subject to satisfaction of the corresponding Vesting Conditions:
|
Tranche:
|
Number of
Restricted Stock Units |
Vesting
Date |
Vesting Conditions
|
1 - Performance/Retention
|
[________]
|
Four (4) year
anniversary of Date of Grant |
[Performance goals], and continued Service through the Vesting Date The Restricted Stock Units will vest on the following Vesting Dates subject to satisfaction of the corresponding Vesting Conditions:
|
2 –
Retention |
[________]
|
Four (4) year
anniversary of Date of Grant |
Continued Service through the Vesting Date
|
3 – Performance/Retention
|
[________]
|
Five (5) year
anniversary of Date of Grant |
[Performance goals], and continued Service through the Vesting Date
|
4 -
Retention |
[________]
|
Five (5) year
anniversary of Date of Grant |
Continued Service through the Vesting Date
|
[NAME OF PARTICIPANT]
Print Name
|
SYNNEX CORPORATION
By:
Its:
|
Payment for Restricted Stock Units
|
No cash payment is required for the Restricted Stock Units you receive. You are receiving the Restricted Stock Units in consideration for Services rendered by you.
|
Vesting
|
The Restricted Stock Units that you are receiving will vest as shown in the Notice of Restricted Stock Unit Award.
No additional Restricted Stock Units vest after your Service as an Employee or a Consultant has terminated for any reason.
|
Forfeiture
|
If your Service terminates for any reason, then your Award expires immediately as to the number of Restricted Stock Units that have not vested before the termination date and do not vest as a result of termination.
This means that the unvested Restricted Stock Units will immediately be cancelled. You receive no payment for Restricted Stock Units that are forfeited.
The Company determines when your Service terminates for this purpose and all purposes under the Plan and its determinations are conclusive and binding on all persons.
|
Leaves of Absence
|
For purposes of this Award, your Service does not terminate when you go on a military leave, a sick leave or another
bona fide
leave of absence, if the leave of absence was approved by the Company in writing and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work.
If you go on a leave of absence, then the vesting schedule specified in the Notice of Restricted Stock Unit Award may be adjusted in accordance with the Company’s leave of absence policy or the terms of your leave. If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Restricted Stock Unit Award may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule.
|
Nature of Restricted Stock Units
|
Your Restricted Stock Units are mere bookkeeping entries. They represent only the Company’s unfunded and unsecured promise to issue Shares on a future date. As a holder of Restricted Stock Units, you have no rights other than the rights of a general creditor of the Company.
|
Deferral Elections
|
You may elect to defer the settlement of any Restricted Stock Units that vest pursuant to this Award in accordance with the rules set forth below and any rules and procedures that may hereafter be adopted by the Committee. Such election (“Deferral Election”) may not extend the settlement of the Restricted Stock Units beyond the earlier of (a) 30 days after your separation from service, as defined for purposes of Section 409A of the Code (provided, however, that if you are a “specified employee” as defined under Section 409A of the Code upon your separation from service, your Restricted Stock Units may not be settled prior to the six month anniversary of your separation from service, to the extent required to avoid taxation under Section 409A), or (b) the tenth anniversary of the Date of Grant. Unless otherwise provided by the Committee in accordance with the requirements of Section 409A, Deferral Elections must be in writing, must be received by the Company at its headquarters no later than 30 days following the Date of Grant, must be irrevocable no later than 30 days following the Date of Grant, and will only be effective with respect to Restricted Stock Units that vest at least 12 months following the date that the Deferral Election is made and becomes irrevocable.
|
No Retention Rights
|
Neither your Award nor this Agreement gives you the right to be employed or retained by the Company or a subsidiary of the Company in any capacity. The Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause.
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Adjustments
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The number of Restricted Stock Units covered by this Award shall be subject to adjustment in the event of a stock split, a stock dividend or a similar change in Company Shares, and in other circumstances, as set forth in the Plan.
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Successors and Assigns
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Except as otherwise provided in the Plan or this Agreement, every term of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, legal representatives, successors, transferees and assigns.
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Notice
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Any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon the earliest of personal delivery, receipt or the third full day following mailing with postage and fees prepaid, addressed to the other party hereto at the address last known in the Company’s records or at such other address as such party may designate by ten (10) days’ advance written notice to the other party hereto.
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Section 409A of the Code
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This Agreement is intended to comply with Section 409A of the Code, and its provisions shall be interpreted in a manner consistent with such intent. You acknowledge and agree that changes may be made to this Agreement to avoid adverse tax consequences to you under Section 409A.
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Applicable Law
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This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions).
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Miscellaneous
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You understand and acknowledge that (i) the Plan is entirely discretionary, (ii) the Company and your employer have reserved the right to amend, suspend or terminate the Plan at any time, (iii) the grant of your Award does not in any way create any contractual or other right to receive additional grants of awards (or benefits in lieu of awards) at any time or in any amount and (iv) all determinations with respect to any additional grants, including (without limitation) the times when awards will be granted, the number of Shares subject to the awards, and the vesting schedule, will be at the sole discretion of the Company.
The value of this Award shall be an extraordinary item of compensation outside the scope of your employment contract, if any, and shall not be considered a part of your normal or expected compensation for purposes of calculating severance, resignation, redundancy or end-of-service payments, bonuses, long-service awards, pension or retirement benefits or similar payments.
You understand and acknowledge that participation in the Plan ceases upon termination of your Service for any reason, except as may explicitly be provided otherwise in the Plan or this Agreement.
You hereby authorize and direct your employer to disclose to the Company or any Subsidiary any information regarding your employment, the nature and amount of your compensation and the fact and conditions of your participation in the Plan, as your employer deems necessary or appropriate to facilitate the administration of the Plan.
You consent to the collection, use and transfer of personal data as described in this subsection. You understand and acknowledge that the Company, your employer and the Company’s other Subsidiaries hold certain personal information regarding you for the purpose of managing and administering the Plan, including (without limitation) your name, home address, telephone number, date of birth, social insurance number, salary, nationality, job title, any Shares or directorships held in the Company and details of all awards or any other entitlements to Shares awarded, canceled, exercised, vested, unvested or outstanding in your favor (the “Data”). You further understand and acknowledge that the Company and/or its Subsidiaries will transfer Data among themselves as necessary for the purpose of implementation, administration and management of your participation in the Plan and that the Company and/or any Subsidiary may each further transfer Data to any third party assisting the Company in the implementation, administration and management of the Plan. You understand and acknowledge that the recipients of Data may be located in the United States or elsewhere. You authorize such recipients to receive, possess, use, retain and transfer Data, in electronic or other form, for the purpose of administering your participation in the Plan, including a transfer to any broker or other third party with whom you elect to deposit Shares acquired under the Plan of such Data as may be required for the administration of the Plan and/or the subsequent holding of Shares on your behalf. You may, at any time, view the Data, require any necessary modifications of Data or withdraw the consents set forth in this subsection by contacting the Human Resources Department of the Company in writing.
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The Plan and Other Agreements
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The text of the Plan is incorporated in this Agreement by reference. All capitalized terms in this Agreement shall have the meanings assigned to them in the Plan. This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Award. Any prior agreements, commitments or negotiations concerning this Award are superseded. This Agreement may be amended by the Committee without your consent; however, if any such amendment would materially impair your rights or obligations under the Agreement, this Agreement may be amended only by another written agreement, signed by you and the Company.
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Name of Optionee:
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[Name of Optionee]
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Type of Option:
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Incentive Stock Option
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Exercise Price Per Share:
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$
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Grant Date:
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[Date of Grant]
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Vesting Commencement Date:
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[Vesting Commencement Date]
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Vesting Schedule:
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This Option becomes exercisable with respect to the first 12/60th of the Shares subject to this Option when you complete 12 months of continuous Service as an Employee or a Consultant from the Vesting Commencement Date. Thereafter, this Option becomes exercisable with respect to an additional 1/60th of the Shares subject to this Option when you complete each additional month of Service.
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Expiration Date:
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[Expiration Date] This Option expires earlier if your Service terminates earlier, as described in the Stock Option Agreement.
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Tax Treatment
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This Option is intended to be an incentive stock option under Section 422 of the Internal Revenue Code or a nonstatutory option, as provided in the Notice of Stock Option Grant. Even if this Option is designated as an incentive stock option, it shall be deemed to be a nonstatutory option to the extent required by the $100,000 annual limitation under Section 422(d) of the Internal Revenue Code.
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Vesting
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This Option becomes exercisable in installments, as shown in the Notice of Stock Option Grant. This Option will in no event become exercisable for additional Shares after your Service as an Employee or a Consultant has terminated for any reason.
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Term
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This Option expires in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Grant Date, as shown on the Notice of Stock Option Grant (5th anniversary for a more than 10% stockholder as provided under the Plan if this is an incentive stock option). This Option may expire earlier if your Service terminates, as described below.
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Regular Termination
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If your Service terminates for any reason except “Misconduct” (as defined in the Plan), death or “Disability” (as defined in the Plan), then this Option will expire at the close of business at Company headquarters on the date 3 months after the date your Service terminates (or, if earlier, the Expiration Date). The Company determines when your Service terminates for this purpose and all purposes under the Plan and its determinations are conclusive and binding on all persons.
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Death
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If your Service terminates because of death, then this Option will expire at the close of business at Company headquarters on the date 12 months after the date your Service terminates (or, if earlier, the Expiration Date). During that period of up to 12 months, your estate or heirs may exercise the Option.
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Disability
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If your Service terminates because of your Disability, then this Option will expire at the close of business at Company headquarters on the date 12 months after the date your Service terminates (or, if earlier, the Expiration Date).
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Misconduct
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If your Service terminates because of your Misconduct, then this Option will expire at the close of business at Company headquarters on the date that your Service terminates.
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Leaves of Absence
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For purposes of this Option, your Service does not terminate when you go on a military leave, a sick leave or another
bona fide
leave of absence, if the leave was approved by the Company in writing and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work.
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Form of Payment
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When you submit your notice of exercise, you must include payment of the Option exercise price for the Shares you are purchasing. Payment may be made in the following form(s):
• Your personal check, a cashier’s check or a money order.
• Certificates for Shares that you own, along with any forms needed to effect a transfer of those Shares to the Company. The value of the Shares, determined as of the effective date of the Option exercise, will be applied to the Option exercise price. Instead of surrendering Shares, you may attest to the ownership of those Shares on a form provided by the Company and have the same number of Shares subtracted from the Shares issued to you upon exercise of the Option. However, you may not surrender or attest to the ownership of Shares in payment of the exercise price if your action would cause the Company to recognize a compensation expense (or additional compensation expense) with respect to this Option for financial reporting purposes.
• By delivery on a form approved by the Company of an irrevocable direction to a securities broker approved by the Company to sell all or part of the Shares that are issued to you when you exercise this Option and to deliver to the Company from the sale proceeds an amount sufficient to pay the Option exercise price and any withholding taxes. The balance of the sale proceeds, if any, will be delivered to you. The directions must be given by providing a notice of exercise form approved by the Company.
• By delivery on a form approved by the Company of an irrevocable direction to a securities broker or lender approved by the Company to pledge Shares that are issued to you when you exercise this Option as security for a loan and to deliver to the Company from the loan proceeds an amount sufficient to pay the Option exercise price and any withholding taxes. The directions must be given by providing a notice of exercise form approved by the Company.
• If permitted by the Committee, by a “net exercise” arrangement pursuant to which the number of Shares issuable upon exercise of the Option shall be reduced by the largest whole number of Shares having an aggregate Fair Market Value that does not exceed the aggregate exercise price (plus tax withholdings, if applicable) and any remaining balance of the aggregate exercise price (and/or applicable tax withholdings) not satisfied by such reduction in the number of whole Shares to be issued shall be paid by you in cash other form of payment permitted under this Option. The directions must be given by providing a notice of exercise form approved by the Company.
• Any other form permitted by the Committee in its sole discretion.
Notwithstanding the foregoing, payment may not be made in any form that is unlawful, as determined by the Committee in its sole discretion.
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However, if this Option is designated as a nonstatutory stock option in the Notice of Stock Option Grant, then the Committee may, in its sole discretion, allow you to transfer this Option as a gift to one or more family members. For purposes of this Agreement, “family member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (including adoptive relationships), any individual sharing your household (other than a tenant or employee), a trust in which one or more of these individuals have more than 50% of the beneficial interest, a foundation in which you or one or more of these persons control the management of assets, and any entity in which you or one or more of these persons own more than 50% of the voting interest.
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In addition, if this Option is designated as a nonstatutory stock option in the Notice of Stock Option Grant, then the Committee may, in its sole discretion, allow you to transfer this option to your spouse or former spouse pursuant to a domestic relations order in settlement of marital property rights.
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The Committee will allow you to transfer this Option only if both you and the transferee(s) execute the forms prescribed by the Committee, which include the consent of the transferee(s) to be bound by this Agreement.
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Retention Rights
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Neither your Option nor this Agreement gives you the right to be employed or retained by the Company or a subsidiary of the Company in any capacity. The Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause.
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Stockholder Rights
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Your Options carry neither voting rights nor rights to dividends. You, or your estate or heirs, have no rights as a stockholder of the Company unless and until you have exercised this Option by giving the required notice to the Company and paying the exercise price. No adjustments will be made for dividends or other rights if the applicable record date occurs before you exercise this Option, except as described in the Plan.
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Adjustments
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The number of Shares covered by this Option and the exercise price per Share shall be subject to adjustment in the event of a stock split, a stock dividend or a similar change in Company Shares, and in other circumstances, as set forth in the Plan.
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Successors and Assigns
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Except as otherwise provided in the Plan or this Agreement, every term of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, legal representatives, successors, transferees and assigns.
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Notice
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Any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon the earliest of personal delivery, receipt or the third full day following mailing with postage and fees prepaid, addressed to the other party hereto at the address last known in the Company’s records or at such other address as such party may designate by 10 days’ advance written notice to the other party hereto.
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Applicable Law
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This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions).
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Miscellaneous
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You understand and acknowledge that (i) the Plan is entirely discretionary, (ii) the Company and your employer have reserved the right to amend, suspend or terminate the Plan at any time, (iii) the grant of an option does not in any way create any contractual or other right to receive additional grants of options (or benefits in lieu of options) at any time or in any amount and (iv) all determinations with respect to any additional grants, including (without limitation) the times when options will be granted, the number of Shares offered, the exercise price and the vesting schedule, will be at the sole discretion of the Company.
The value of this Option shall be an extraordinary item of compensation outside the scope of your employment contract, if any, and shall not be considered a part of your normal or expected compensation for purposes of calculating severance, resignation, redundancy or end-of-service payments, bonuses, long-service awards, pension or retirement benefits or similar payments.
You understand and acknowledge that participation in the Plan ceases upon termination of your Service for any reason, except as may explicitly be provided otherwise in the Plan or this Agreement.
You hereby authorize and direct your employer to disclose to the Company or any Subsidiary any information regarding your employment, the nature and amount of your compensation and the fact and conditions of your participation in the Plan, as your employer deems necessary or appropriate to facilitate the administration of the Plan.
You consent to the collection, use and transfer of personal data as described in this subsection. You understand and acknowledge that the Company, your employer and the Company’s other Subsidiaries hold certain personal information regarding you for the purpose of managing and administering the Plan, including (without limitation) your name, home address, telephone number, date of birth, social insurance number, salary, nationality, job title, any Shares or directorships held in the Company and details of all options or any other entitlements to Shares awarded, canceled, exercised, vested, unvested or outstanding in the your favor (the “Data”). You further understand and acknowledge that the Company and/or its Subsidiaries will transfer Data among themselves as necessary for the purpose of implementation, administration and management of your participation in the Plan and that the Company and/or any Subsidiary may each further transfer Data to any third party assisting the Company in the implementation, administration and management of the Plan. You understand and acknowledge that the recipients of Data may be located in the United States or elsewhere. You authorize such recipients to receive, possess, use, retain and transfer Data, in electronic or other form, for the purpose of administering your participation in the Plan, including a transfer to any broker or other third party with whom you elect to deposit Shares acquired under the Plan of such Data as may be required for the administration of the Plan and/or the subsequent holding of Shares on your behalf. You may, at any time, view the Data, require any necessary modifications of Data or withdraw the consents set forth in this subsection by contacting the Human Resources Department of the Company in writing.
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The Plan and Other Agreements
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The text of the Plan is incorporated in this Agreement by reference. All capitalized terms in the Agreement shall have the meanings assigned to them in the Plan. This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Option. Any prior agreements, commitments or negotiations concerning this Option are superseded. This Agreement may be amended by the Committee without your consent; however, if any such amendment would materially impair your rights or obligations under the Agreement, this Agreement may be amended only by another written agreement, signed by you and the Company.
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OPTIONEE INFORMATION:
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Name:
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Social Security Number:
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Address:
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Employee Number:
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OPTION INFORMATION:
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||||||
Date of Grant:
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_______________, 20__
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Type of Stock Option:
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|||||
Exercise Price per Share: $______________
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Nonstatutory (NSO)
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|||||
Total number of Shares of SYNNEX CORPORATION (the “Company”) covered by option: __________
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Incentive (ISO)
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Check for $
, payable to “SYNNEX CORPORATION”
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The certificate for the Purchased Shares should be sent to the following address:
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____________________________________________
____________________________________________ ____________________________________________ ____________________________________________ |
1.
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I understand that all sales of Purchased Shares are subject to compliance with the Company’s policy on securities trades.
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2.
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I hereby acknowledge that I received and read a copy of the prospectus describing the Company’s 2013 Stock Incentive Plan and the tax consequences of an exercise.
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3.
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In the case of a nonstatutory option, I understand that I must recognize ordinary income equal to the spread between the fair market value of the Purchased Shares on the date of exercise and the exercise price. I further understand that I am required to pay withholding taxes at the time of exercising a nonstatutory option.
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4.
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In the case of an incentive stock option, I agree to notify the Company if I dispose of the Purchased Shares before I have met both of the tax holding periods applicable to incentive stock options (that is, if I make a disqualifying disposition).
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SIGNATURE AND DATE:
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__, 20__
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a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Kevin M. Murai
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Kevin M. Murai
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President and Chief Executive Officer
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a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Marshall W. Witt
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Marshall W. Witt
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Chief Financial Officer
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/s/ Kevin M. Murai
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Kevin M. Murai
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/s/ Marshall W. Witt
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Marshall W. Witt
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