UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): January 20, 2021
SYNNEX CORPORATION
(Exact name of registrant as specified in its charter)
|
Delaware |
001-31892 |
94-2703333 |
|
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
|
44201 Nobel Drive, Fremont, California |
|
94538 |
|
(Address of principal executive offices) |
|
(Zip Code) |
(510) 656-3333
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
|
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
|
|
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
|
|
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
|
|
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
|
Common Stock, par value $0.001 per share |
SNX |
The New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Long-Term Incentive Program. On January 20, 2021, the Compensation Committee (the “Committee”) of the Board of Directors of SYNNEX Corporation (the “Company”) granted under the Company’s annual long-term incentive (“LTI”) program performance-based restricted stock units (“RSUs”) to the following executive officers (each, an “Officer”) with the following targets:
In order to allow for vesting of 200% of the target performance-based RSUs (the maximum amount possible pursuant to the vesting criteria discussed below), each executive officer is granted a number of performance-based RSUs equal to two times the target grant above. Due to the then pending spin-off of the Concentrix business from the Company, the Committee did not approve a 2020-2022 long-term incentive program during last year. Since the spin-off occurred on December 1, 2020 and to account for last year, the Committee has approved a 2021-2022 LTI program along with the 2021-2023 LTI program. There are separate performance measures and metrics for each LTI program.
The RSUs under either program will vest based upon (1) the achievement, on a cumulative basis, of the applicable minimum threshold financial performance measure based on a formula derived from earnings per share (“EPS Formula”) target performance and (2) the achievement of an average return on invested capital (“ROIC”) target performance, with both performance metrics measured over a two-year period ending November 30, 2022 or a three-year period ending November 30, 2023, as applicable. The minimum threshold EPS Formula target performance percentage is 75% and the maximum target performance percentage is 166.7% for each Officer under each program. The actual number of RSUs, if the applicable minimum threshold EPS Formula percentage is met, will vest on a sliding scale of the EPS Formula target performance percentage actually achieved. The resulting number of shares that will vest under either program based on the EPS Formula metric will then be adjusted by a percentage increase or decrease corresponding with SYNNEX’ performance as measured by the ROIC performance percentages, but in no event will an Officer be entitled to receive more than the number of shares set forth in the table above (the “Maximum Amount”). If the minimum threshold EPS Formula target performance is not achieved, no RSUs will vest, regardless of the achievement of the ROIC performance.
At 100% target EPS Formula and ROIC performance, the Officers’ RSUs will vest as to 50% of the Maximum Amount. Any unvested shares underlying the RSUs will not vest and will be canceled. In addition, the vesting of the RSUs is contingent upon the Officer still being employed by SYNNEX on the date of vesting. In the event of an Officer’s death prior to the vesting date, SYNNEX will transfer to such Officer’s estate the number of shares that would have vested on or prior to such Officer’s death.
Offer Letter/Amendment. On January 25, 2021, the Company and Dennis Polk, President and Chief Executive Officer of the Company, entered into an amendment to Mr. Polk’s January 4, 2018 offer letter, outlining the terms of the vesting of his unvested equity awards in the event that he terminates his employment with the Company for a reason other than for cause (as such term is defined in the amendment), disability (as such term is defined in the amendment) or death. The amendment provides for the acceleration to the termination date of the vesting of eighty percent (80%) of his unvested equity awards, except any unvested long-term performance-based RSU awards and any unvested equity grant awards with an effective date less than three (3) months prior to termination, subject to conditions outlined in the amendment. The foregoing description of the amendment to Mr. Polk’s offer letter is qualified in its entirety by reference to the full text of the Amendment to Offer Letter, which is filed hereto as Exhibit 10.1 and is incorporated herein by reference.
Also on January 25, 2021, the Company and Peter Larocque, President, North America Technology Solutions of the Company, entered into an offer letter, which outlines the terms of the vesting of his unvested equity awards in the event that he terminates his employment with the Company on or after December 1, 2023 for a reason other than cause (as such term is defined in the letter), disability (as such term is defined in the letter) or death. The letter provides for the acceleration to the termination date of the vesting of all of his then unvested equity grant awards, except any unvested long-term performance-based RSU awards and any unvested equity grant awards with an effective date less than three (3) months prior to termination, subject to conditions outlined in the letter. The letter also contains certain restrictive covenants, including a non-competition and confidentiality provision, for the benefit of the Company. The foregoing description of Mr. Larocque’s offer letter is qualified in its entirety by reference to the full text of the Offer Letter, which is filed hereto as Exhibit 10.2 and is incorporated herein by reference.
2
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
|
Exhibit No. |
|
Description of Document |
|
10.1 |
|
Amendment to Offer Letter dated January 4, 2018, by and between SYNNEX Corporation and Dennis Polk |
|
10.2 |
|
Offer Letter dated January 25, 2021, by and between SYNNEX Corporation and Peter Larocque |
|
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
Date: January 26, 2021 |
SYNNEX CORPORATION |
|
|
|
|
|
|
|
By: |
/s/ Simon Y. Leung |
|
|
|
Simon Y. Leung Senior Vice President, General Counsel and Corporate Secretary |
4
Exhibit 10.1
January 25, 2021
|
|
Re: |
Amendment to Promotion Offer Letter |
Dear Mr. Polk:
Reference is made to that certain promotion offer letter, dated January 4, 2018 (the “Offer Letter”), by and between you and SYNNEX Corporation (“Company”).
Pursuant to Section 14(b) of the Offer Letter, as of the date first written herein, the Company and you wish to amend the Offer Letter by this letter amendment (“Amendment”). Capitalized terms used in this Amendment which are not otherwise defined herein, shall have the meanings given such terms in the Offer Letter. Therefore, the parties agree that a new Section 7(c) shall be added as follows:
|
Section 1 |
Amendment to the Agreement |
Section 7(c) Retirement: if you terminate your employment with the Company for a reason other than Cause, Disability or death and you sign a standard release of claims, then, subject to Section 8, eighty percent (80%) of your then unvested equity grant awards, except any unvested long-term performance-based RSU awards and any unvested equity grant awards with an effective date less than three (3) months prior to your termination, will be accelerated upon your date of termination.
|
Section 2 |
Reference to and Effect on the Agreement |
2.1Upon the effectiveness of this Amendment, on and after the date hereof, each reference to the Agreement shall mean and be a reference to the Agreement as amended hereby.
2.2Except as specifically set forth above, the Agreement, and all other documents, instruments and agreements executed and/or delivered in connection therewith, shall remain in full force and effect, and are hereby ratified and confirmed.
2.3The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of a party, nor constitute a waiver of any provision of the Agreement, or any other documents, instruments and agreements executed and/or delivered in connection therewith.
Page 2
If the above changes to the Agreement are acceptable, please acknowledge your acceptance below and return the executed portion of this Amendment on or before January 25, 2021.
Very truly yours,
SYNNEX Corporation
/s/ Kevin M. Murai
Kevin M. Murai
Chairman of the Board of Directors
AGREED AND ACCEPTED:
/s/ Dennis Polk____________
Dennis Polk
Exhibit 10.2
January 25, 2021
|
|
Re: |
Retirement Offer Letter |
Dear Mr. Larocque:
SYNNEX Corporation (the “Company”) is pleased to offer you the following benefits in consideration for your past and future services in connection with your retirement:
|
1. |
At Will Employment. Employment with the Company is for no specific period of time. Your employment with the Company will be “at will,” meaning that either you or the Company may terminate your employment at any time and for any reason, with or without Cause. |
|
2. |
Retirement Benefits. If you terminate your employment with the Company for a reason other than Cause, Disability or death on or after December 1, 2023 and you sign a standard release of claims, then, subject to Section 3 below, all of your then unvested equity grant awards, except any unvested long-term performance-based RSU awards and any unvested equity grant awards with an effective date less than three (3) months prior to your termination, will be accelerated upon your date of termination. |
|
3. |
Conditions to Receipt of Retirement Benefits. |
(a)Release of Claims. The receipt of any retirement benefits pursuant to Section 2 will be subject to your signing and not revoking a release of claims in a form acceptable to the Company within such period of time as the Company may require, but not to exceed twenty-one (21) days following your termination of employment.
(b)Noncompetition; Nonsolicitation. The receipt of any retirement benefits pursuant to Section 2 will be subject to your not violating the provisions of Section 4. In the event you breach the provisions of Section 4, or if you elect not to comply with the terms of Section 4(a) on noncompetition or Section 4(b)(ii) on nonsolicitation of business, all continuing payments and benefits to which you would have been entitled pursuant to Section 2 will immediately cease.
|
4. |
Restrictive Covenants. |
(a)Noncompete. For a period beginning on your termination date and ending [twelve (12)] months thereafter, you agree to not, directly or indirectly, engage in (whether as an employee, consultant, agent, proprietor, principal, partner, stockholder, corporate officer, director or otherwise), nor have any ownership interest in or participate in the financing, operation, management or control of, any person, firm, corporation or
Page 2
business that competes with Company (or any parent or subsidiary of the Company); provided, however, that you shall not be prohibited from owning, solely as an investment, up to 1% of the stock of a publicly traded corporation or up to 5% of the equity of a non-publicly traded company. You may elect not to comply with the provisions of this Section 4(a) following your termination of employment. However, all continuing payments and benefits to which you would have been entitled pursuant to Section 2 will immediately cease.
(b)Nonsolicit.
(i)For a period beginning on your termination date and ending [twelve (12)] months thereafter, you, directly or indirectly, whether as employee, owner, sole proprietor, partner, director, member, consultant, agent, founder, co-venturer or otherwise, will not solicit, induce or influence any person to leave employment with the Company (or any parent or subsidiary of the Company).
(ii)For a period beginning on your termination date and ending [twelve (12)] months thereafter, you, directly or indirectly, whether as employee, owner, sole proprietor, partner, director, member, consultant, agent, founder, co-venturer or otherwise, will not directly or indirectly solicit business from any of the Company’s customers and users on behalf of any business that directly competes with the principal business of the Company (or any parent or subsidiary of the Company). You may elect not to comply with the provisions of this Section 4(b)(ii) following your termination of employment. However, all continuing payments and benefits to which you would have been entitled pursuant to Section 2 will immediately cease.
(c)Understanding of Covenants. You represent that you (i) are familiar with the foregoing covenants not to compete and not to solicit, and (ii) are fully aware of your obligations hereunder, including, without limitation, the reasonableness of the length of time, scope and geographic coverage of these covenants.
|
5. |
Definition of Terms. The following terms referred to in this agreement will have the following meanings: |
(a)Cause. “Cause” means (i) commission of a felony, an act involving moral turpitude, or an act constituting common law fraud, and which has a material adverse effect on the business or affairs of the Company or its affiliates or stockholders, (ii) intentional or willful misconduct or refusal to follow the lawful instructions of the Board of Directors (“Board”) or (iii) intentional breach of Company confidential information obligations which has an adverse effect on the Company or its affiliates or stockholders. For these purposes, no act or failure to act shall be considered “intentional or willful” unless it is done, or omitted to be done, in bad faith without a reasonable belief that the action or omission is in the best interests of the Company.
(b)Disability. “Disability” means that you have been unable to perform the principal functions of your duties due to a physical or mental impairment, but only if such inability has lasted or is reasonably expected to last for at least six (6)
Page 3
months. Whether you have a Disability will be determined by the Board based on evidence provided by one or more physicians selected by the Board.
|
6. |
Miscellaneous Provisions. |
(a)Waiver. No provision of this agreement will be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by you and by an authorized officer of the Company (other than you). No waiver by either party of any breach of, or of compliance with, any condition or provision of this agreement by the other party will be considered a waiver of any other condition or provision or of the same condition or provision at another time.
(b)Entire Agreement. This agreement constitutes the entire agreement of the parties hereto and supersedes in their entirety all prior representations, understandings, undertakings or agreements (whether oral or written and whether expressed or implied) of the parties with respect to the subject matter hereof. This agreement may only be modified by a signed writing between the parties.
(c)Choice of Law. The laws of the State of California (without reference to its choice of laws provisions) will govern the validity, interpretation, construction and performance of this agreement.
(d)Severability. The invalidity or unenforceability of any provision or provisions of this agreement will not affect the validity or enforceability of any other provision hereof, which will remain in full force and effect.
(e)Withholding. All payments made pursuant to this agreement will be subject to withholding of applicable income and employment taxes.
If the above offer is acceptable, please acknowledge your acceptance below and return the executed portion of this Amendment on or before January 25, 2021.
Very truly yours,
SYNNEX Corporation
/s/ Dennis Polk
Dennis Polk
President and Chief Executive Officer
AGREED AND ACCEPTED:
/s/ Peter Larocque_________
Peter Larocque